After a two-week courtship, the Maple Leafs have bought
control of the Raptors, the Air Canada Centre and Union
Station for what could be "as much as" C$400M, according to
David Shoalts of the Toronto GLOBE & MAIL. Construction of
Air Canada, the arena being built by the Raptors, will
continue, with some design changes for hockey. The changes
"are not expected to affect" the arena's scheduled opening
date next February. Leafs Majority Owner Steve Stavro said
Union Station will act as the primary entrance for Air
Canada, which is directly behind it. The Leafs had planned
to build an arena at Exhibition Place, but yesterday Stavro
said, "Single ownership of two teams made one arena
possible. The economics made much more sense." The Leafs
will retain ownership of Maple Leaf Gardens (GLOBE & MAIL,
2/13). In Toronto, DeMara, Moloney & Brazao put the deal at
C$500M, an estimate Leafs Minority Owner Larry Tanenbaum
said was "close" (TORONTO STAR, 2/13). The TORONTO SUN and
FINANCIAL POST both put the purchase price at C$350M (2/13).
In Toronto, David Israelson breaks the deal down as such:
C$288M for the Air Canada Centre, about C$179M for the
Raptors and at least $36M for Union Station (STAR, 2/13).
COSTS WERE TOO MUCH: Raptors Majority Owner Allan
Slaight sold his 90% stake in the team for an undisclosed
amount and the Bank of Nova Scotia also sold its 10%
interest (TORONTO STAR, 2/13). Slaight, on the prospects of
going ahead with a one-tenant arena: "The economics were
getting tough. ... If the Canadian dollar is worth 90 cents
US, you can do it. But if it's worth less than 70 cents US,
it becomes obvious pretty quickly that you need both teams
in the same arena." Slaight also noted the high taxes for
athletes in Canada and said, "When I combined those things
with escalating player salary demands and the threat of an
NBA lockout next summer, this is what made sense" (Bill
Harris, TORONTO SUN, 2/13). Leafs officials said it's "too
soon" to talk about personnel changes (TORONTO STAR, 2/13).
THE PLAYERS: The deal was "triggered" by Sun Media
Corp. CEO Paul Godfrey (TORONTO STAR, 2/13). In Toronto,
Mike Ganter reports that many expect Tanenbaum "will play a
prominent role" in the new Raptors (TORONTO SUN, 2/13). The
GLOBE & MAIL's Gayle Macdonald writes that "Tanenbaum's low
profile belies his real involvement" in the deal (GLOBE &
MAIL, 2/13). But the STAR's Chris Young writes that Leafs
President Ken Dryden could emerge "as the man running The
Show." He "may end up the CEO overseeing both these teams"
(TORONTO STAR, 2/13). Also, David Israelson reports that
Sponsor Air Canada is a "clear winner." It gets to keep its
name on the Raptors arena, "right now more valuable with two
teams inside" (David Israelson, TORONTO STAR, 2/13).
REAX: In Toronto, Gare Joyce writes that the sale "has
the potential to turn around the hoop franchise ... in the
long run" (GLOBE & MAIL, 2/13). The STAR's Young: "There's
no doubt the Raptors' chances of survival here just got a
huge uplift. ... But does it ensure prosperity? No" (STAR,
2/13). A STAR editorial: "Torontonians should welcome the
takeover of the Raptors by the Leafs" (TORONTO STAR, 2/13).
