SBJ/February 28 - March 6, 2011/Opinion

Resurgence changing how sports world views Canadian market

Often over the past 20 years, many of us would have argued professional sport in Canada was in crisis. Only Toronto seemed immune.

For those who tend not to look northward, here are a few memory joggers:

• The NBA’s Grizzlies left Vancouver for Memphis.

• The MLB’s Expos bounced from Montreal to Washington, D.C.

• The NHL’s Nordiques and Jets took off from Quebec City and Winnipeg for Colorado and Phoenix, respectively. Three other Canadian NHL teams — the Calgary Flames, Edmonton Oilers and Ottawa Senators — each came close to financial failure and teetered on the edge of extinction. At one point, even the storied Montreal Canadiens were reportedly underwater, 26 Stanley Cups notwithstanding!

• MLB’s Toronto Blue Jays were usually no better than mediocre. In fact, the Jays haven’t won their division since 1993 and finished fourth in their five-team American League division the last three consecutive years.

• The CFL launched an ambitious expansion into the United States only to retract two years later.

• The CFL’s Ottawa franchise folded twice and Montreal went under once. These are cities of 1 million and 3.5 million people, respectively.

• The Formula One race in Montreal, North America’s only F1 event and reportedly the third-most-watched television event in the world in 2005, was shut down following the 2008 race and thought unlikely to return.

Looking back, it seemed like Canada, one-tenth the size, in population and market, of its big brother to the south, could not house pro franchises and non-Olympic mega events at the highest level. Confidence was down, sport fans looked depressed and Canadian owners were licking their fiscal wounds. Thoughts of an NHL with only two or three Canadian teams (plus the demise of the CFL) were not uncommon or unfounded.

Fast forward to 2011, and the professional Canadian sports landscape is suddenly sparkling. A 180-degree turn, some might say. To illustrate, we present a few facts worth noting:

• After placing an MLS team in Toronto in 2007, a team standing out as one of the league’s brightest lights off the field, Don Garber’s expansion crew recently added teams in Vancouver (starting this year) and Montreal (2012).

• The CFL is doing well, heading back to Ottawa and making serious inquiries about expanding into eastern Canada. In fact, with the exception of Toronto, the CFL is experiencing some of its most notable success ever. The last two Grey Cups — Canada’s Super Bowl — have drawn TV audiences in excess of 6 million viewers, record highs for the event.

• The Blue Jays hired general manager Alex Anthopoulos, a Greek Canadian, after the 2009 season. Anthopoulos is thought by many to be one of the sharpest young general managers in the game and, perhaps not surprisingly, the Jays finished 2010 eight games over .500 and produced a dynamic offseason in preparation for 2011.

• While the NHL is now struggling in the southern U.S., there is much attention and interest focused on the league possibly returning to Winnipeg, Quebec City or both. In fact, Canada’s leading sport network, TSN, and its sport business correspondent, David Naylor, presented a six-part series last June outlining the business case for the return of the NHL to Manitoba and Quebec and a second team for the Toronto area. “Hockey Night in Canada,” the country’s most-watched regular sports program, presented a similar piece last December.

• The F1 race is back in Montreal (the Ferraris and McLarens hit the Gilles Villeneuve Circuit in early June), and the Canadian Sponsorship Forum will run at the same time as the F1 race.

• Ongoing rumors, innuendo and hints of truth continue to suggest that two and possibly four NFL teams might be considering moving into Toronto, North America’s fourth-largest market and a city with a growing regional population racing toward 9 million. The Buffalo Bills have signed a multiyear deal to play a total of eight preseason and regular-season games in the Rogers Centre over a five-year span.

Wonder why the Canadian turnaround is so pronounced?

We can give some credit to a strong Canadian dollar (the loonie is now on par with the U.S. greenback) and a strong Canadian economy that felt the U.S. financial sector implosion much less severely. Also, a growing number of Canadian billionaires place Canadian professional sports in perhaps its strongest position ever.

If we mix in a successful Vancouver 2010 Winter Olympics and ongoing discussions of Toronto bidding for the 2020 Summer Olympics, we might find Canada is emerging as an attractive place for sport industrialists to ply their trade and generate acceptable margins.

But what does that mean to American sponsors and league administrators? Should they approach Canada as just a flavor of the month? Or, should they think about buying into a country that has performed admirably when it comes to integrating sponsor support and growing passionate fan bases?

In an era of globalization, we all may need to view the sports market as North America rather than just the U.S.

Rick Burton (rhburton@syr.edu) is the David B. Falk Professor of Sport Management at Syracuse University and former commissioner of the Australian National Basketball League. Norm O’Reilly (norman.oreilly@uottawa.ca) is an associate professor of sport business at the University of Ottawa.

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