SBD/Issue 41/Franchises

Second NHL Team In Toronto Could Value At $400-600M

MLSE Could Be Entitled To 
$250M Territorial Payment
The "value of a second NHL team in Toronto would range between" $400-600M (all figures US), and Maple Leaf Sports & Entertainment (MLSE) would be entitled to a one-time territorial payment of up to $250M, according to sports economists cited by David Shoalts of the GLOBE & MAIL. SportsCorp President Marc Ganis said that a second team in Toronto "would instantly become the third most valuable franchise in the league behind" the Maple Leafs and Rangers and on par with the Red Wings and Canadiens. The payment to MLSE "would range between" $90-250M, "depending on factors such as arena rental, sponsorship, broadcast rights and advertising." The rights fee "would be lower if the team rented the Air Canada Centre and significantly higher if the club operated another arena" in the Toronto area. Meanwhile, Shoalts wrote "theoretically, the NHL could not use its 'dominant position' in the professional hockey market to prevent competition with an existing company, in this case the Maple Leafs." Univ. of Toronto's Faculty of Law Associate Dean Anita Anand said that a lawsuit "could be filed on those grounds even though the Competition Bureau, which acts as an enforcement arm for the federal government in antitrust matters, ruled last March that the NHL does not engage in monopolistic behaviour." NHL Deputy Commissioner Bill Daly in an e-mail affirmed that the league's "constitution does not guarantee a veto." Daly said any franchise relocation into Southern Ontario "would only require a majority vote" of the BOG (GLOBE & MAIL, 11/10).

OFFSIDES CALL: NHL Commissioner Gary Bettman "admitted yesterday that the Ontario market could probably support a second NHL team," but he "dismissed the probability." Bettman: "Can the Ontario market support another team? Probably. But you can't base a decision on probability. You have got to study the market closely." Bettman said that "relocating an existing franchise to the Toronto area to compete" with the Maple Leafs "would not happen because all 30 of the NHL's clubs are in good financial shape." He added that "expansion was not on the horizon, either, because of 'uncertain economic conditions.'" Bettman said that the "only way the league would consider relocation of a franchise ... is if an owner decided ... that his team could not survive in its market." Bettman: "Anyone who thinks there are any (official) discussions going on right now about another team in Ontario is wrong" (GLOBE & MAIL, 11/11).

MEDIA MATTERS: The GLOBE & MAIL's William Houston notes a poll asked NHL broadcasters what one change they would make to the NHL and the "second most cited change was franchise relocation." TSN's Pierre McGuire: "You can easily have eight teams in Canada. But move existing teams and save expansion for Europe. European expansion is legit. It's the only place where they can get new-found revenues." CFMJ-AM host Bill Watters said that a second team in Toronto "should be the league's first priority" (GLOBE & MAIL, 11/11).

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