TORONTO, Nov. 10, 2011 /CNW/ - A large and affluent local market allows
Toronto's professional sports franchises to achieve financial success
without producing contending teams, The Conference Board of Canada
suggests in its latest analysis of the Canadian professional sports
"Strong market fundamentals for pro sports in the greater Toronto region
mean that many Toronto teams can succeed financially without having to
succeed competitively," said Glen Hodgson, Senior Vice-President and
Chief Economist, and co-author of the publication, Why Are Toronto Teams Financial Successes, but Competitive Flops? (http://www.conferenceboard.ca/reports/briefings/bigLeagues/briefing-10.aspx).
"Unlike smaller markets, where teams may need to win to be financially
viable businesses, teams in Toronto don't have to win consistently to
deliver a financial return to their owners."
The Conference Board series, Playing in the Big Leagues (http://www.conferenceboard.ca/reports/briefings/bigLeagues/briefing-2.aspx), identifies four pillars to determine the viability of a franchise in
a given market: size of the population; income level; corporate
presence; and a level playing field within its league. Toronto fares
well on all of these indicators. Moreover, the strong appreciation of
the loonie over the past decade has meant millions of dollars in
savings for teams that play in leagues where salaries are set in U.S.
dollars, yet another positive factor for Toronto-based franchises.
Competitive conditions (http://www.conferenceboard.ca/reports/briefings/bigLeagues/briefing-4.aspx) differ by league (the playing field is much less level in baseball
than in hockey, for example), but these differences alone do not
explain the poor results of Toronto franchises. Moreover, the quality
of sporting facilities does not appear to be a factor, since all
Toronto teams play in modern amenities. Toronto franchises also appear
to be aware of the changing demographics in the city and are reaching
out to attract the 40 per cent of Torontonians who were not born in
The remaining franchise-specific factor (http://www.conferenceboard.ca/reports/briefings/bigLeagues/briefing-8.aspx) is ownership and management ability. The current Toronto professional
sports scene includes six franchises. The Toronto Maple Leafs (National
Hockey League), Toronto Raptors (National Basketball Association) and
Toronto FC (Major League Soccer) are owned by Maple Leaf Sports and
Entertainment, while Rogers Communications owns the Toronto Blue Jays
(Major League Baseball). The two franchises owned by individuals are
the Toronto Argonauts of the Canadian Football League and the Toronto
Rock of the National Lacrosse League (NLL).
Most Toronto franchises can generate significant profits without
necessarily putting a competitive product on display, so overall
success is measured in dollars rather than wins. Although Toronto
franchises have made management and player-personnel changes in recent
years to try to improve their competitiveness, corporately-owned teams
don't have the same burning platform as the individually-owned teams -
or as franchises in other markets, particularly smaller markets.
The two Toronto-based franchises that are individually-owned have played
for and won championships in their leagues within the past decade. The
Argonauts last won the Grey Cup in 2004 and the Rock are both the
defending NLL champions and the league's most successful franchise.
This report is the 10th in the Conference Board's series Playing in the Big Leagues: What Makes a Professional Sports Team
Successful in Canada? (http://www.conferenceboard.ca/reports/briefings/bigLeagues/briefing-1.aspx).
Upcoming publications will use the framework developed throughout the
series to assess the outlook for franchises in major Canadian cities
and sports leagues.
SOURCE CONFERENCE BOARD OF CANADA
For further information:
Brent Dowdall, Media Relations, Tel.: 613-889-2352
Yvonne Squires, Media Relations, Tel: 613-526-3090, ext. 221