Leafs for sale (cont'd).....

[Kin]

Well, after a couple days to digest this...I guess it's more of the same really. I never really bought that the OTPP had a great interest in winning the cup and I believe that this new three headed beast has even less of one.

That's not to say a cup win is impossible or anything, if nothing else I'm pretty comfortable saying that Brian Burke wants to win a cup and it's ultimately going to be his decisions that make or break the club, just that it's a structure I wish the club didn't have. I like hearing about teams who have owners who have a similar reaction to wins and losses that I do. Seeing a sports team strictly as a business may be an encroaching reality but I've always believed them, the Leafs especially, to be more than that. It's getting harder and harder to see them that way if that's a one way relationship between a fan and the team.

Deep down I know it's naive to think that pro sports were ever really about civic pride and a sense of community identity but that is what drew me to the Maple Leafs in the first place. Every now and then, when I see how jazzed the city gets when the Leafs win, I catch a little bit of that spirit again. Friday's press conference was another nail in the coffin of that idealism but, at this point, it's 90% nails and 10% coffin anyway.

I'm sure the team will say all the right things and I'm sure they'll fund the team reasonably well as they chase the highest possible return on investment so I don't see much changing personally for me and my relationship with the team. Some brand loyalties just run that deep, I suppose.

 

[GhostofPotvin29]

I'm confident they're going to give the team all the tools to win, and I think it will come down to the GM/coach/players ultimately to do that.

 

[cw]

I'm confident they're going to give the team all the tools to win, and I think it will come down to the GM/coach/players ultimately to do that.

I think that has been the case since OTPP took majority control.

Stavro was inside the top 100 richest families in Canada. When Gretzky was dangled, he couldn't take on that contract financially. He was too leveraged.

Tanenbaum is inside the top 100 richest families in Canada. But his net worth is less than MLSE's and like Stavro, he's got his money tied up in other businesses. He doesn't have $1.3 billion in cash laying around doing nothing to write OTPP a cheque. Like Stavro, he might have been able to put together a leveraged consortium to take control but he may well have run into cash problems down the road (from his other businesses like Stavro or trying to add major assets to MLSE - like developing the broadcasting investment).

The OTPP's deep pockets were integral in building up the financial strength of this franchise. People seem to forget that the Leafs were the 9th or 10th most valuable franchise in 1998 or so and 8th in revenues with close to a break even bottom line. Because of MLG, there were serious revenue limits that was affecting their ability to spend on payroll.

Ballard had run the place poorly so there was ample opportunity that many could have accomplished to improve it. But to do so took big money - that a guy as rich as Stavro didn't have. Media seem to easily look at OTPP's original investment and compare it to the sale price overlooking the additional investments the group made to get the Raptors, build the ACC, buy more shares in the company to take control, etc -  hundreds of millions of dollars.

The corporate ownership of the Leafs by OTPP was a very, very good thing that has provided a rock solid financial foundation for the Leafs for generations to come and was something that, as rich as Stavro was, he couldn't have accomplished without their significant assistance.

With sports franchises growth in asset value over the last couple of decades, corporate ownership is very likely to continue to grow because these franchises and the dollars required are bigger than most wealthy individuals can handle on their own. I think that is even more true with NHL clubs that have floundering bottom lines - a group can share that risk and it opens up a much greater population of possible owners when the list of individual families is very short.

Unlike 1998, the Leafs have a good building, good practice and fitness facilities, good farm team setup, enough quality management that they could arguably manage several teams, lots of scouts and coaching staff - close to if not as many as any team in the NHL, etc.

Regardless of whether the owner is a single person or a corporation, once a good GM is hired and given max payroll dollars and top assets to operate and develop the club, those owners have done their part. There are no more excuses. From that point, it's up to the GM, his staff, the coaches and the players to get the job done. Beyond that, they'll need some luck.

I'm positive that in the years to come, that statement will get proven to be the case.

Going forward, I think that having broadcasters with deep pockets and a major stake is even better. They know their ratings are not going to be good if their club sucks. They also know that over the years to come, their brands and their investment will suffer if they don't deliver championships. From a competitive standpoint for the Leafs on the ice, I don't see this deal as a bad thing at all.

 

[Kin]

Regardless of whether the owner is a single person or a corporation, once a good GM is hired and given max payroll dollars and top assets to operate and develop the club, those owners have done their part.

I'm not overly inclined to engage in the umpteenth discussion around the quality of the OTPP as owners but I do think, just on it's face, I don't think this is true. Or, at the very least, I think there's a problem leaving it as such. The GM isn't the final authority on a hockey club. His performance needs to be judged and evaluated and ultimately decided on. This might be the most important decision when it comes to a team's ultimate success. What makes for a "good" or a "bad" GM in the context of a team's performance is an ongoing process that is ultimately in the hands of the owners, whether that's in the form of a President or an actual owner themselves.

We can kick back and forth on what other less tangible impact an owner can have on a club but I think it's ultimately fair to say that if a GM is ultimately measured by the performance of the team he assembles, it's fair to ultimately judge an ownership group on who they hire as GM. The OTPP's record in that regard is a matter of fair debate.

 

[cw]

Regardless of whether the owner is a single person or a corporation, once a good GM is hired and given max payroll dollars and top assets to operate and develop the club, those owners have done their part.

I'm not overly inclined to engage in the umpteenth discussion around the quality of the OTPP as owners but I do think, just on it's face, I don't think this is true. Or, at the very least, I think there's a problem leaving it as such. The GM isn't the final authority on a hockey club. His performance needs to be judged and evaluated and ultimately decided on. This might be the most important decision when it comes to a team's ultimate success. What makes for a "good" or a "bad" GM in the context of a team's performance is an ongoing process that is ultimately in the hands of the owners, whether that's in the form of a President or an actual owner themselves.

We can kick back and forth on what other less tangible impact an owner can have on a club but I think it's ultimately fair to say that if a GM is ultimately measured by the performance of the team he assembles, it's fair to ultimately judge an ownership group on who they hire as GM. The OTPP's record in that regard is a matter of fair debate.

JFJ was a mistake. Even Peddie has admitted that.

I had no problem with the structure of the process MLSE went through to find him. They did a professional search, short listed, had a variety of their management interview the candidates and picked one.

A key problem they had at the time is there weren't any proven GMs available - so some guessing was involved in the final decision. And a key decision Peddie admitted they made in error was to not groom a rookie GM rather than just handing over the reins immediately. They could have groomed someone under Quinn and I think JFJ and the team would have been better off for it.

I also felt they were too slow in gassing JFJ. I was done with him in Mar 2006. It took them 2 more years to dispose of him.

So they made some mistakes in who they hired. But as I stated in my quote above "once a good GM is hired" ...

What makes for a "good" or a "bad" GM in the context of a team's performance is an ongoing process that is ultimately in the hands of the owners, whether that's in the form of a President or an actual owner themselves.

MLSE does reviews of their GMs each year. From the mid season timing of when JFJ got fired, they obviously do some ongoing review during the year. Again, structurally, I have no issue with them doing that though my conclusions at points in time with JFJ in particular would have been different.

We see the same problem with private owners and the hiring and firing of their GMs - a heck of a lot more misses than hits in sports. I don't see a corporate vs single owner issue here either. It is not so much who makes the decision as it is whether the right decision gets made. Board decisions are likely to be less emotional and over time, like juries, I'd probably lean with a small group rather than one individual making the better decision as long as that group is capable (ie juries who do not understand the law can't be relied upon to make the best legal decision). I see no evidence of where someone on a board cannot have as much expertise to make that decision as a particular single owner. In fact, the CEO may well be in the best position to make that call as he's worked with the GM on a day to day basis.

I think it's ultimately fair to say that if a GM is ultimately measured by the performance of the team he assembles, it's fair to ultimately judge an ownership group on who they hire as GM. The OTPP's record in that regard is a matter of fair debate.

As I qualified my quoted statement above with once a good GM is hired, I think my statement is fine.

The jury is out on Burke. I have made criticisms of his "retooling" direction. But I had no big problem with his selection. The guy has won a Cup and had nothing in his track record to be ashamed of.

I do not believe hiring is an exact science. Human beings are involved. All an owner can do is try to make the best judgement possible. Like with UFAs, sometimes people can't deliver after a string of good seasons. We see that with the firings of GMs and other employees in business.

Heavy odds are, Burke won't win a Cup during his tenure and he'll depart a fired GM. If each team has a 1 in 30 chance of winning a Cup each season, there's roughly an 85% chance that GM will not win within five years. Burke started with clubs that were closer to 1/200 or 1/300 chances of winning so his chances of winning a Cup during his first five years is probably closer to around 2%.

Will I hammer MLSE if Burke doesn't cash in on his 2% chance to win a Cup in five years? Not much. They hired a credible, proven and capable GM, gave him all the resources any team in the NHL could hope for and have largely let him do his job.

They also did that with Pat Quinn and canned him as GM when his slightly better than 2% chance (13%?) didn't come in after four years.

So I don't see this corporate ownership as a very significant problem in Toronto. They seem to have learned from their mistake with JFJ and have someone in place that might eventually get the job done - though the odds are seriously against him for it to happen any time soon.

 

[Kin]

So they made some mistakes in who they hired. But as I stated in my quote above "once a good GM is hired" ...

No, I got that. What I wanted to highlight though is that you and I agree that Burke is, or at the very least has the track record of, a good NHL GM. But regardless of prior resume, the owners of a team are responsible for his performance and deciding when to cut the cord based on his performance. Good GM/Bad GM, their job is to decide what they want out of a General Manager and evaluate him. Not every owner will have the same yardstick there. Some will be happy with a GM who runs a tight, profitable ship and some will demand a certain level of on-field results.

MLSE, in their years as owners, did not produce much in the way of on-field/ice/court success with any of their clubs. Someone may have to help me out on the TFC side of things but as far as the Raptors and Leafs are concerned they hired six guys at various points to run their Basketball/Hockey operations(four permanent, two interim). The collection of Babcock, Colangelo, Embry, JFJ, Fletcher and Burke is a pretty motley crew performance wise, regardless of their rationale at the time for hiring them. This is sports, after all, and regardless of whether we're evaluating players, coaches, GMs or owners there is no exact science by which to do it.

The hiring of a GM, in that respect, can be likened to making a high draft choice or signing a free agent. There's no exact way to tell if they'll succeed but we still make those judgments in hindsight and that's what lets us call Doug McLean a great big pair of clown shoes.

I wasn't disagreeing with the sentence you bolded completely. I was just clarifying that, for me, "A good GM" is something that can really only be determined in hindsight and an owner's responsibility extends beyond that.

Like I said, I think there are other less tangible things that are an owner's responsibility and that impacts the perception of a team by players but also is a crucial part of a team's relationship with their fans. My longer post above is primarily related to those things. Those are important to some, not important to others. I get that. But if we're just talking nuts and bolts then people live and die by their results and MLSE as it existed, does not have much to hang it's hat on.

 

[cw]

Saw this today:
Bell?s exclusive NHL/NFL deals off-side, says regulator
In a precedent-setting ruling, the CRTC has ordered Bell Mobility to provide exclusive NHL and NFL mobile content to its wireless rival Telus.

?Consumers should have choice,? said CRTC chairman Konrad von Finckenstein in an interview. ?If you are very keen on NHL or NFL content, then you should be able to see it on your provider. You shouldn?t be forced to buy Bell.?

But Bell said it doesn?t have the right to sublicense or resell this content.

And the NHL says it would object to being compelled to share its programming outside the exclusive contract it has with Bell.

And then this:
BCE says CRTC overstepped its bounds
Will challenge ruling on sports streaming
BCE, which operates Bell Canada Inc., is refuting the grounds for the decision, however, charging the commission is overstepping its boundaries.

?There has been no market failure that needs to be addressed in this case,? a Bell spokesperson said in an emailed statement. The company argues that both the NHL and NFL each ?shopped? their respective mobile rights packages among Canadian providers in 2010 with Bell emerging the winner.

?The nature of the agreement between the NFL and Bell reflects the fact that the NFL?s preferred model is based upon exclusivity,? Bell said, adding neither party plans to alter the agreement. As for its deal with the NHL, the company said ?the parties consider that this model is working well and have no plans to amend the exclusivity provisions.?
...
Despite the hawkish language, it remains to be seen if Bell will formally challenge the decision in the courts or through an appeal to the federal cabinet. Bell as well as Rogers must win consent from the CRTC to buy certain MLSE assets.
...
A Bell spokesperson said it, too, has contacted the two leagues about the matter, and ?neither the NFL (nor NHL) nor Bell has any intention of amending the existing contractual language,? Bell said.

That's pretty defiant language from a company when a gov't regulator rules against it.

What's remarkable is they would make a bet that they would ultimately prevail over the CRTC for over half a billion dollars to buy MLSE and capitalize on exploiting this area of broadcasting with it the business day before that CRTC decision against them came down.

There's zero chance this case or the legal considerations here were ignored when contemplating the deal. None.

Who wants to bet against Bell going for a cabinet appeal decision and winning? I don't care to come off as a conspiracy theorist but the circumstances here reek of a fix that must already be in place that short circuits regulatory due process.

 

[cw]

The hiring of a GM, in that respect, can be likened to making a high draft choice or signing a free agent. There's no exact way to tell if they'll succeed but we still make those judgments in hindsight and that's what lets us call Doug McLean a great big pair of clown shoes.

When I evaluate that, I liken it closer to a UFA signing. As part of the evaluation of the owner's responsibility for a GM, what the opportunity (pool) was is a consideration. Certainly, at the time of JFJ's hiring, there was not an obvious "one that got away" UFA GM. I felt that at the time of Babcock's hiring as well though I do not know those NBA execs remotely as well - it was more of an impression I was left with. To some extent, they guessed on college rookie UFAs when a good proven pro wasn't on the market.

That factors into my assessment of MLSE just like recognizing the UFA market for Burke has been pretty lousy that last couple of summers.

But if we're just talking nuts and bolts then people live and die by their results and MLSE as it existed, does not have much to hang it's hat on.

No they don't in terms of won-loss or the standings.

This is sports, after all, and regardless of whether we're evaluating players, coaches, GMs or owners there is no exact science by which to do it.

I was just clarifying that, for me, "A good GM" is something that can really only be determined in hindsight and an owner's responsibility extends beyond that.

I wonder about those bolded sentences. If we expect the owners to assess their GM beyond basic won-loss criteria and ahead of hindsight, it seems a little hypocritical to dismiss those very same factors of assessment when we assess the owners handling of their GM.

When I review all the circumstances surrounding those GM decisions, I don't conclude anything horrible or bad that went on with ownership. They were credible rookies to try. There were credible interim GMs. Both the current GMs have been in some sort of rebuild/retooling mode so we're not going to see great results on the recent won-loss charts.

When we assess management in business, we have common and formal accounting criteria like profit and loss statements (won-loss records) to look at. But we also have to look at how those results came about and why before firing that manager if the numbers don't look that hot. There could be circumstances beyond their control or known circumstances like major product development costs (like rebuilding) that haven't paid off yet. Etc.

We also know in business that ALL managers make mistakes. Good managers make fewer of them and are prompt in identifying and fixing their mistakes. Burke's made mistakes but he's promptly fixed a bunch of them as he's gone along.

So when I take a look at the whole of MLSE's efforts, they've put in place the best assets in the business for their GMs to succeed. They seem to have good strutural process for the selection and review of their GMs (which is not an exact science). They've improved their GM management depth. They're doing a heck of a lot right here.

Unfortunately, they're in a business where the average odds of on ice/court success are a little over 3% in a given season. If they keep doing the right things, they're likely to improve upon those 3% odds and stand a better chance of eventually getting lucky enough to win a championship.

At the end of the day, as much as we'd all love to celebrate a championship, there's no guarantees. If MLSE stay the course doing what they've been doing, eventually, they're likely to win a championship. Fans cannot ask much more than the above of an owner beyond the luck of winning.

 

[Kin]

When I evaluate that, I liken it closer to a UFA signing. As part of the evaluation of the owner's responsibility for a GM, what the opportunity (pool) was is a consideration. Certainly, at the time of JFJ's hiring, there was not an obvious "one that got away" UFA GM. I felt that at the time of Babcock's hiring as well though I do not know those NBA execs remotely as well - it was more of an impression I was left with. To some extent, they guessed on college rookie UFAs when a good proven pro wasn't on the market.

I think the problem with the likening of the hiring of a GM to the signing of a free agent is that signing a free agent is a luxury whereas hiring a GM is a necessity. If there's a crummy FA pool a team is poorly served by going out and signing a bad FA even if he's the best guy available. You can't take that POV with regards to a GM. You've got to have one and you've got to identify the right guy.

There are advantages/disadvantages to hiring either a "proven" GM or a first timer. You hire a proven guy and you have a better idea of whether or not he'll be competent but, I think, the fact that a proven GM is available means something too. First time GM's are a bigger risk but they're probably a bigger reward too. Ken Holland, Lou Lamoriello, David Poile. They're all first time GM's who've probably proven so valuable to their clubs that they're never going to be available unless they firmly tell their owners they want to go elsewhere.

Regardless though, I think a team/owner can be criticized for their failures even if there is no guaranteed success available. That's why I think it's more along the lines of a draft pick. A GM will still be taken to task for a poor draft record even if he doesn't constantly have the #1 pick in a constant stream of Crosby-like drafts. It's the team's job to identify who, proven or unproven, is going to be able to get the job done. In the case of JFJ and Babcock, I think it's important to point out that they were pretty spectacular failures and not just uninspiring middle of the road choices.

When I review all the circumstances surrounding those GM decisions, I don't conclude anything horrible or bad that went on with ownership. They were credible rookies to try. There were credible interim GMs. Both the current GMs have been in some sort of rebuild/retooling mode so we're not going to see great results on the recent won-loss charts.

Again, I think that's setting the bar pretty insanely low for a ownership group. I think they can be legitimately criticized for their choices even if their choice wasn't recently released from an insane asylum or the winner of a "You Be the GM" fan contest.

JFJ wasn't David Conte or Jim Nill. Rob Babcock wasn't Sam Presti or Dell Demps. They had no real claim to any sort of significant organizational success when they were hired. If we're likening the hiring of an untested GM to signing college FA's rather than pros then MLSE signed guys who'd played on the third line on college and hoped they'd be able to be first liners in the pros. 

A lot of guys who would have been available to be hired at those times as AGM's at other franchises have since gone on to be very successful GM's in their respective leagues. MLSE had the same opportunity to find a hidden talent and failed pretty miserably both times.

Unfortunately, they're in a business where the average odds of on ice/court success are a little over 3% in a given season. If they keep doing the right things, they're likely to improve upon those 3% odds and stand a better chance of eventually getting lucky enough to win a championship.

I typically don't like expressing the "odds" of winning a championship as if it were a random occurrence that each team shared a equal piece of prior to a season. Winning a championship doesn't happen by luck or the spin of a roulette wheel.

But even still that would only really hold true if "on ice/court" success were strictly limited to winning the championship. No MLSE owned team has even made the playoffs, a measurement that 53% of teams qualify for in the NBA/NHL, in the last five seasons. Probably their most successful hire has been Brian Burke who's a guy that you and I have both criticized pretty fairly for his mistakes.

It's not just the Leafs and Raptors. TFC has been pretty messy in their efforts too.  At some point I think it's fair to start wondering if there's not something systemic that's leading to multiple franchises being unable to achieve even the barest minimums of competitive success over seven or eight years.

 

[cw]

First time GM's are a bigger risk but they're probably a bigger reward too. Ken Holland, Lou Lamoriello, David Poile. They're all first time GM's who've probably proven so valuable to their clubs that they're never going to be available unless they firmly tell their owners they want to go elsewhere.

Poile started under Cliff Fletcher in Atlanta. He then was the Washington Capitals GM for 15 years before he was fired and replaced by George McPhee. Poile went on to the Preds the following year. Regardless, I think he's a good GM.

 

[Kin]

Poile started under Cliff Fletcher in Atlanta. He then was the Washington Capitals GM for 15 years before he was fired and replaced by George McPhee. Poile went on to the Preds the following year. Regardless, I think he's a good GM.

Sorry, that was a hiccup on my part. That was supposed to be Jim Rutherford. Not that it's the biggest deal either way.

 

[Kin]

It kind of got lost amidst the other issues but I was wondering today. If 75% of MLSE is worth 1.3 billion, which makes the whole company worth 1.73 billion give or take, what does that mean the Leafs sold for? I know it'll be hard to extricate that number but...700 million? I'm sure I'm forgetting something but that would put the value of the Raptors, the ACC, BMO field and TFC at a billion or so. So...more than that? 800?

 

[Deebo]

It kind of got lost amidst the other issues but I was wondering today. If 75% of MLSE is worth 1.3 billion, which makes the whole company worth 1.73 billion give or take, what does that mean the Leafs sold for? I know it'll be hard to extricate that number but...700 million? I'm sure I'm forgetting something but that would put the value of the Raptors, the ACC, BMO field and TFC at a billion or so. So...more than that? 800?

Forbes says the leafs are worth 521 million and the Raps are worth 399.

But that seems low based on the sale price.

They also say the leafs turn 81 million in profit a year which will only go up with home playoff dates, a business that turns 80M+ in somewhat guaranteed profits has got to be worth 700+. They could be off with thier profit estimations though.

 

[Kin]

Forbes says the leafs are worth 521 million and the Raps are worth 399.

But that seems low based on the sale price.

Yeah, I wonder if that reflects the value the Leafs represent to Bell/Rogers other operations.

Anyways, it's just curiousity. I mean, at 1.7 billion, if we assume that the Raptors are a little overvalued by Forbes and are more in the 350 million range I mean...could the Leafs be in the billion dollar range?

 

[Deebo]

Forbes says the leafs are worth 521 million and the Raps are worth 399.

But that seems low based on the sale price.

Yeah, I wonder if that reflects the value the Leafs represent to Bell/Rogers other operations.

Anyways, it's just curiousity. I mean, at 1.7 billion, if we assume that the Raptors are a little overvalued by Forbes and are more in the 350 million range I mean...could the Leafs be in the billion dollar range?

80M+ annually in perpetuity could very well be worth close to a billion.

 

[The Red Polar Bear]

I think what people are forgetting is Maple Leaf Square, owned by MLSE. Apartments, Real Sports, e11even, etc. That real estate is probably a large chunk of it.

Unless I'm wrong and that's not included.

 

[Hockey_gal]

I think what people are forgetting is Maple Leaf Square, owned by MLSE. Apartments, Real Sports, e11even, etc. That real estate is probably a large chunk of it.

Unless I'm wrong and that's not included.

I'm pretty sure it is...Real Sports I know is.

 

[Leafaholic99]

I think what people are forgetting is Maple Leaf Square, owned by MLSE. Apartments, Real Sports, e11even, etc. That real estate is probably a large chunk of it.

Unless I'm wrong and that's not included.

Wasn't it MLSE that was sold to Bell/Rogers? That would include the teams and all the real estate.

 

[Optimus Reimer]

I think what people are forgetting is Maple Leaf Square, owned by MLSE. Apartments, Real Sports, e11even, etc. That real estate is probably a large chunk of it.

Unless I'm wrong and that's not included.

Wasn't it MLSE that was sold to Bell/Rogers? That would include the teams and all the real estate.

Leafaholic is correct. 

One thing I would like to see is for Leafs TV to be available for purchase across the country, and not just in the TO area.  I would also like to see games on CTV in addition to TSN, RSO and CBC.  Or some other arrangement so that living outside Ottawa I can see more Leaf games on TV.   

 

[Kin]

One thing I would like to see is for Leafs TV to be available for purchase across the country, and not just in the TO area.  I would also like to see games on CTV in addition to TSN, RSO and CBC.  Or some other arrangement so that living outside Ottawa I can see more Leaf games on TV. 

Unfortunately, that's really an issue they won't get around. I'm sure Rogers/Bell would love to sell Leafs TV nationwide but the realities of the league's rules on broadcast territory will torpedo that.