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SBJ/May 6-12, 2013/FranchisesPrint All
As Tim Leiweke heads to Toronto to begin putting his imprint on the Maple Leaf Sports & Entertainment conglomerate, the newly hired CEO knows the talk that is following him north of the border.
“I hear people saying that the MLSE platform is not near the platform of AEG and that I won’t have nearly the responsibilities that I had at AEG,” said Leiweke, comparing his new employer to the Los Angeles-based company he abruptly left as president and CEO in March. “I was with my past company for 18 years, and it was not always heaven living where I was living and working for who I was working for, but I was there for 18 years. I will be here longer than people are betting on. They underestimate the resources of our owners. Those who think this is short-term are naïve.”
Leiweke’s hands-on approach has some questioning whether MLSE, with multiple owners and a culture different from the one at AEG, is a good fit.
Photo by:GETTY IMAGES
But even with those tasks, observers wonder if it’s enough. They wonder, too, about the fit. Leiweke, after all, is the high-octane executive who’d been tasked with running AEG’s global sports empire, and that effort included him chasing a multibillion-dollar NFL deal in Los Angeles. Sure, MLSE has more than the teams, with its real estate and TV network holdings, but there also will be a distinct corporate culture adjustment for Leiweke in making the move to Canada.
“I was shocked when I heard [about Leiweke’s move],” said Brian Cooper, president and CEO of Toronto-based sports management company S&E Sponsorship Group. Cooper is a former MLSE executive who worked under both current COO Tom Anselmi and former CEO Richard Peddie. “Tim’s not a stay-at-home defenseman,” Cooper said. “He likes to carry the puck. But the footprint for real estate development is limited at MLSE, [and] broadcast companies own it, so all the broadcast deals are done. He’s also going to have to manage up, to spend a lot more time with owners and committees than he’s used to. Then there’s the learning curve about Canadian sensibilities. Tim is a smart guy, but this is not a slam dunk.”
None of it sways Leiweke. He acknowledges the new, and different, opportunities that exist with MLSE. Whereas his former employer was led by a company namesake, CEO Phil Anschutz, MLSE is owned by a partnership between powerhouse Canadian media companies (and rivals) Bell Canada and Rogers Communications, along with MLSE Chairman Larry Tanenbaum, who holds a 25 percent stake. The company, in addition to its team assets, owns three networks, the Air Canada Centre and two sports bars and is a partner in the ownership of a $500 million mixed-use real estate development known as Maple Leaf Square.
“Bell and Rogers want to win to drive ratings and distribution, and Larry wants to win,” Leiweke said. “Although they come at it with different means and ends, they are for the same thing. We have to figure out the core and make it very solid. Winning is priority No. 1. The growth will be different. MLSE is not interested in China and Europe. I don’t feel a need to rewrite history. I don’t look at MLSE to re-create an AEG. It is a different kind of platform. There is not an enormous appetite to conquer the world, and I like the idea to focus on core growth.”
Where an AEG feel could come in, however, is in any restructuring of the front offices of the MLSE teams. Specifically, drawing from Leiweke’s AEG playbook, the idea would be to turn to former athletes for top front-office positions, and then expecting key players to follow for those franchises’ rosters.
At AEG, Leiweke picked former athletes like Luc Robitaille for top front-office posts.
Photo by:GETTY IMAGES
More recently, and in one of Leiweke’s last moves at AEG, he named former Los Angeles Galaxy player Chris Klein president of the MLS franchise.
“I am blessed at MLSE with an organization that I don’t have to do a lot of retooling, but with all due respect, I look at Luc at the Kings and Chris Klein at the Galaxy, and they get it,” Leiweke said of the influence those former players are having.
The Raptors could be where Leiweke might make his first key MLSE moves.
Leiweke soon will begin his personnel evaluation process in Toronto. As he starts those meetings with MLSE executives, he said particular attention will be paid to the Raptors’ side of the MLSE business. That could put Raptors general manager Bryan Colangelo, who’s been in that post since 2006, under the microscope.
“The Raptors have to develop a culture as a place where people want to be,” Leiweke said. “I will be meeting with everyone and reserve any judgment until I get through that.”
Speculation last week had Leiweke talking with former Los Angeles Lakers coach Phil Jackson about a role with the Raptors, possibly to oversee Colangelo. While Leiweke refused to comment on any potential new hires, he did say he will consider hiring former NBA players as he looks to rebuild the organization.
“I have great relationships in the NBA,” Leiweke said. “I have some guys in mind and I believe in that formula.”
At the Maple Leafs, the role of president has remained vacant since former president and general manager Brian Burke was relieved of those duties in January. Burke’s successor as general manager, David Nonis, could now find himself reporting to a Leiweke president hire before the start of the next NHL season.
Doug Gilmour and Mats Sundin, a pair of recent inductees into the Hockey Hall of Fame who have had their numbers retired by the Maple Leafs, fit the bill of the kind of Robitaille-like hirings that Leiweke could make if he were to follow the Los Angeles example. Gilmour is currently general manager of Kingston of the Ontario Hockey League; the recently retired Sundin lives in Sweden but still has a home in Toronto. Neither was available for comment at press time.
As for Toronto FC, Kevin Payne, the 17-year president of D.C. United, was hired in the same capacity for the Toronto club late last year after it finished its 2012 season with a 5-21-8 record. Leiweke will be evaluating the management of the soccer franchise, as well.
The hope, of course, is that any Leiweke executive hires in Toronto would replicate for their franchises what the Leiweke executive hires have seen happen in Los Angeles, in terms of attracting players. Both the Leafs and Raptors have been largely unsuccessful in their attempts to lure prized unrestricted free agents to Toronto in recent years.
“He’s the ultimate salesman,” said Pat Brisson, the Los Angeles-based agent for CAA Hockey, which represents Sidney Crosby, John Tavares and Patrick Kane, among other NHL stars. “The thing with Tim is, he not only sells — he delivers. He paints a picture for you and then makes it even better. In a salary cap system, where most teams courting players are restricted to offer a similar term and money, it’s the little things that can make a difference. Tim has a gift for making players and their families very comfortable. I’m sure he’ll have a huge impact on the teams at MLSE.”
Brisson first encountered Leiweke when the agent represented Robitaille and Robitaille hoped to end his long NHL career in Los Angeles, where it started. Leiweke helped engineer the Kings’ acquisition of Robitaille from Detroit. When Robitaille’s playing days ended in 2006, Leiweke said he wanted to groom him as a sports business executive. A year later, Leiweke gave Robitaille the title of Kings president of business operations.
Klein’s story is similar. He played for the Galaxy from 2007-10 before beginning a front-office career under Leiweke. He was named Galaxy president in January.
Klein said his mentor is destined for success in Toronto.
“He’ll be a great fit in Toronto with MLSE,” Klein said. “Tim has a proven track record of success, and he brings vision, creativity and leadership to the table every day.”
While Leiweke considers bringing in former players to work for the MLSE-owned teams, it is not clear what changes may be ahead inside MLSE’s corporate offices, particularly related to the future of Anselmi, a highly respected and longtime MLSE executive who before Leiweke’s hire was running MLSE in his job as president and COO.
“Tom is a very good operator, and on the surface, Tim has said that he wants Tom to stay,” said Reg Bronskill, CEO of The Bronskill Group, a Toronto-based sports and entertainment marketer that counts NHL and MLB teams as clients. “Tom is very astute, and Tim’s priorities will be looking at senior management to make sure they are performing at a high level.”
Anselmi was not available for comment.
Leiweke’s arrival in Toronto also has stoked speculation that he would look to help bring an NFL franchise to town, given his previous involvement at AEG in building a proposed NFL stadium in downtown Los Angeles.
“To have an ally to bring an NFL team would be a big boon to Canada,” said Paul Godfrey, former president of the Toronto Blue Jays, a former Toronto political leader and current president and chief executive officer of Postmedia Network in Toronto. “He has all that experience, and from the MLSE point of view, Tim brings sophistication and pizazz to the job. Toronto is desperate to have a winner in any sport, and having Tim involved in the sports landscape is planting the seed for future success.”
Leiweke said any NFL efforts are on the back burner as he puts his immediate focus on the performance of the MLSE-owned teams.
“I think you could privatize a new stadium in Toronto and make it work, “ Leiweke said, “[but] it will take a while, and it won’t distract from the issues at hand.”
On those issues, and on MLSE overall, those who have worked with Leiweke say the executive will be certain to leave his mark.
“You can’t stand still [with Leiweke],” said Tim Harris, senior vice president of the Los Angeles Lakers, of which AEG is a co-owner. “Tim expects excellence, and he has one eye on the bottom line no matter what he is doing. He is a revenue-generator and he has the ability to hire good people and get out of their way. He is a good quarterback.”
State Sen. Darrell Steinberg (left) and Sacramento Mayor Kevin Johnson celebrate news of the vote.
Photo by:ICON SMI
That group, led by software titan Vivek Ranadivé, agreed to cover a significant amount of any cost overruns for the franchise’s proposed new arena in Sacramento, the sources said, and agreed to a timeline of construction goals. But perhaps most importantly for the seven owners on the relocation committee who voted to overlook the more financially lucrative Seattle opportunity in favor of the Sacramento group, the desired new Kings ownership group agreed to limit how much revenue sharing it would take while playing in the team’s current arena and would end the club’s status as a revenue recipient altogether once moved into the new arena, one of the sources said.
“It is unusual to ask an ownership group coming into the league to agree, before they even get approved, to undertake these kinds of things,” the source said.
The NBA declined to comment, as did the Kings.
The Kings are projected to get about $18 million in supplemental revenue sharing in the coming season based on this past season’s financial performance. That’s among the highest projected amounts for any team in the league. The source, who is close to the Ranadivé group, said that figure will be lower in future years and nonexistent when the team moves into the planned new arena in 2016 because of an expected increase in locally derived revenue.
In Seattle, given that city’s larger and more vibrant corporate market, NBA owners were not worried about needing to subsidize the club, so the revenue-sharing pledge was likely a significant gesture on the part of the Ranadivé group in winning the approval of their potential new partners.
“They eliminated the positive impact Seattle would have as a wealthier market on the rest of the NBA,” said Marc Ganis, a sports consultant who last year advised on the sale of the New Orleans Pelicans. “It does go a long way to resolving many of the objections owners could have had.”
On the arena front, the Sacramento group has proposed a facility that would cost $449 million, including $258 million in public funding. Details on the cost-overrun concessions and construction-goal timelines were not available.
Of course, the Ranadivé group is not yet the Kings’ owner. The Maloof family, which owns the Kings, still has a signed purchase agreement with Chris Hansen, who had wanted to move the team to Seattle. Hansen publicly touted the existence of that purchase agreement last week on the Seattle bid group’s website, sonicsarena.com.
Theoretically, Hansen could move forward with trying to buy the team but keeping it in Sacramento. Whether the NBA would approve that is unclear, given that such a move likely would be viewed as a way to ultimately get the team to Seattle. The Maloofs also could hold onto the team, but the new-arena deal in Sacramento is between the city and the Ranadivé group, not with the Maloofs.
The full NBA ownership is scheduled to vote next week on the relocation request, and few expect any shift from the relocation vote of the committee.
Staff writer John Lombardo contributed to this report.