BMO to Host Winter Classic...

[Pookie]

If the Argos are so great, and there tv numbers (which I believe) are so much better than TFC, why is TFC's value 5 or 6 times the Argos? I think that alone says all it has to say

TFC's value is higher because it has more assets that are available to a potential buyer. TFC owns its stadium. Buildings are considered significant when assigning value as they can be used for more events.

Perhaps more importantly, buying TFC is essentially buying into Major League Soccer given the single entity ownership. As the league profits so do each of the investors (franchise operators). Buying into MLS means shares of expansion fees, league revenue, shared revenue from other clubs and perhaps most importantly a share of Soccer United Marketing (SUM). This is the entity that has held World Cup TV rights, rights for the USNT, rights for Mexican National Team games played in the US, the USSF, etc. It is VERY profitable.

MLSE could do nothing for TFC and it could continue to profit from the dividends that the league generates. They don't have invest another nickel (unless the MLS requires them to do so) and they continue to make good returns. Their attendance could fall off the map and provided MLS does not revoke their "shares", they would continue to make good returns.

The Argos on the other hand represent an interesting opportunity for return on an investment. The Argos have no stadium but MLSE does. Buying them immediately nearly doubles their gate driven rental income... generating as much or potentially more than TFC based on attendance figures and playoff dates... and allows them to reach a much more lucrative TV contract. All for the investment of Jerman Defoe's rumoured total contract value. Given the revenue TFC is said to generate which is a combination of gate receipts, TV/advertising and merchandise, it would seem that owning the building would enable MLSE to pay off the Argos investment within the first year(s). And they don't have to share any of the profits with anyone else.

[Pookie]

Asking price is somewhere near $20 million. Not a same thing!

Defoe's deal, if he signs, is thought to be in the $4.5-5M range... per season... over a 4 year term.

Your calculator will tell you an asking price for the Argos in the $15-20M range would essentially be the same thing.

[Beach_Red]

TFC's value is higher because it has more assets that are available to a potential buyer. TFC owns its stadium. Buildings are considered significant when assigning value as they can be used for more events.

Perhaps more importantly, buying TFC is essentially buying into Major League Soccer given the single entity ownership. As the league profits so do each of the investors (franchise operators). Buying into MLS means shares of expansion fees, league revenue, shared revenue from other clubs and perhaps most importantly a share of Soccer United Marketing (SUM). This is the entity that has held World Cup TV rights, rights for the USNT, rights for Mexican National Team games played in the US, the USSF, etc. It is VERY profitable.

MLSE could do nothing for TFC and it could continue to profit from the dividends that the league generates. They don't have invest another nickel (unless the MLS requires them to do so) and they continue to make good returns. Their attendance could fall off the map and provided MLS does not revoke their "shares", they would continue to make good returns.

The Argos on the other hand represent an interesting opportunity for return on an investment. The Argos have no stadium but MLSE does. Buying them immediately nearly doubles their gate driven rental income... generating as much or potentially more than TFC based on attendance figures and playoff dates... and allows them to reach a much more lucrative TV contract. All for the investment of Jerman Defoe's rumoured total contract value. Given the revenue TFC is said to generate which is a combination of gate receipts, TV/advertising and merchandise, it would seem that owning the building would enable MLSE to pay off the Argos investment within the first year(s). And they don't have to share any of the profits with anyone else.

So, it's like TFC is a Tim Hortons franchise and the Argos are that little donut shop owned by a guy in the neighbourhood.

[Phil]

TFC's value is higher because it has more assets that are available to a potential buyer. TFC owns its stadium. Buildings are considered significant when assigning value as they can be used for more events.

Perhaps more importantly, buying TFC is essentially buying into Major League Soccer given the single entity ownership. As the league profits so do each of the investors (franchise operators). Buying into MLS means shares of expansion fees, league revenue, shared revenue from other clubs and perhaps most importantly a share of Soccer United Marketing (SUM). This is the entity that has held World Cup TV rights, rights for the USNT, rights for Mexican National Team games played in the US, the USSF, etc. It is VERY profitable.

MLSE could do nothing for TFC and it could continue to profit from the dividends that the league generates. They don't have invest another nickel (unless the MLS requires them to do so) and they continue to make good returns. Their attendance could fall off the map and provided MLS does not revoke their "shares", they would continue to make good returns.

The Argos on the other hand represent an interesting opportunity for return on an investment. The Argos have no stadium but MLSE does. Buying them immediately nearly doubles their gate driven rental income... generating as much or potentially more than TFC based on attendance figures and playoff dates... and allows them to reach a much more lucrative TV contract. All for the investment of Jerman Defoe's rumoured total contract value. Given the revenue TFC is said to generate which is a combination of gate receipts, TV/advertising and merchandise, it would seem that owning the building would enable MLSE to pay off the Argos investment within the first year(s). And they don't have to share any of the profits with anyone else.

TFC don't own BMO field. They contributed to its construction, its owned by the city.

[prizby]

TFC's value is higher because it has more assets that are available to a potential buyer. TFC owns its stadium. Buildings are considered significant when assigning value as they can be used for more events.

Perhaps more importantly, buying TFC is essentially buying into Major League Soccer given the single entity ownership. As the league profits so do each of the investors (franchise operators). Buying into MLS means shares of expansion fees, league revenue, shared revenue from other clubs and perhaps most importantly a share of Soccer United Marketing (SUM). This is the entity that has held World Cup TV rights, rights for the USNT, rights for Mexican National Team games played in the US, the USSF, etc. It is VERY profitable.

MLSE could do nothing for TFC and it could continue to profit from the dividends that the league generates. They don't have invest another nickel (unless the MLS requires them to do so) and they continue to make good returns. Their attendance could fall off the map and provided MLS does not revoke their "shares", they would continue to make good returns.

The Argos on the other hand represent an interesting opportunity for return on an investment. The Argos have no stadium but MLSE does. Buying them immediately nearly doubles their gate driven rental income... generating as much or potentially more than TFC based on attendance figures and playoff dates... and allows them to reach a much more lucrative TV contract. All for the investment of Jerman Defoe's rumoured total contract value. Given the revenue TFC is said to generate which is a combination of gate receipts, TV/advertising and merchandise, it would seem that owning the building would enable MLSE to pay off the Argos investment within the first year(s). And they don't have to share any of the profits with anyone else.

TFC don't own BMO Field last time I checked

Are expansion fees shared or are they held by the league office so they can help with the transfer fees of guys like Clint Dempsey, paying down debt, and helping cover losses of half the teams in the league?
As for shared revenue, last time I checked, the league take a cut of kit sponsorship and a percentage of ticket sales are shared among the teams in the league
ABC, ESPN, and Univision hold the US TV rights for the World Cup

The Argos don't pay rent as is...and they still lose money; to then somehow suggest they'll make money in their first year let alone make the entire investment back sounds pretty crazy

My only point is the valuations of the teams says it all for the future

Defoe's deal, if he signs, is thought to be in the $4.5-5M range... per season... over a 4 year term.

Your calculator will tell you an asking price for the Argos in the $15-20M range would essentially be the same thing.

$150,000 a week = $4.5M-5M (although I agree with the range as his base salary, when you look at all the variable bonuses etc...i think it'll be much higher

[Pookie]

So, it's like TFC is a Tim Hortons franchise and the Argos are that little donut shop owned by a guy in the neighbourhood.

Kinda. The little guy has line ups out the door. By buying him, you can close his shop but bring his doughnuts into your building, leverage your infrastructure and increase your traffic.

To those responding with comments over city ownership or BMO, I should have put "owned" in quotes. They are the owner-operator with a stake in the building. Quite correct in that the city maintains ownership.

Just like MLS owns TFC. This management stake still represents a value that is assigned to the TFC "share price" or value.

[MightyDM]

Kinda. The little guy has line ups out the door. By buying him, you can close his shop but bring his doughnuts into your building, leverage your infrastructure and increase your traffic.

To those responding with comments over city ownership or BMO, I should have put "owned" in quotes. They are the owner-operator with a stake in the building. Quite correct in that the city maintains ownership.

Just like MLS owns TFC. This management stake still represents a value that is assigned to the TFC "share price" or value.

Not quite. The City of Toronto owns the stadium, through Exhibition Place. They have an operating/tenancy agreement with MLSE. It would be fair to say MLSE "controls use of" the stadium but it is not an owner in any legal way. It could, for example, host the Grey Cup there now as the operator of the Stadium but could not renovate it without the agreement of the owner, the City. MLSE cannot sell the stadium at all, only the right to occupy it, possibly, although there is usually a change of control clause in these kind of agreements.

[Pookie]

^ I think we are saying the same thing.

Here's the actual report that council considered back in October of 2005.

http://www.ottawa.ca/calendar/ottawa...o%20Report.pdf

MLSEL secures the right, over twenty years, to manage and participate in the revenue from the stadium, and the right to market the naming rights for the stadium to a third party.

For that, they receive a $200,000 annual operating fee and revenue as realized according to a variety of formulas and sources. And no business is going to renovate someone else's building without a vested stake in the profits (grass and rumours of this $100M roof). It would be like remodeling an apartment you rent.

Of course, ultimately the stadium is the city's... for now... but even without a transfer of title, this joint investment provides additional value to TFC should anyone wish to purchase the franchise (and MLS approves). This increases the value of owning a share of TFC. As a buyer, you'd get access to this value. Only highlighting it to explain the valuation differences of the Argos vs TFC.

In any event, its funny to me all this discussion about economic value particularly since the Argos are privately owned and we can only speculate as to their revenue and net operating income.

The facts of the matter are that Tim L is the one that brought up the Argos. They are considering it because it could represent a good investment. Whatever the price, it is attractive enough to them that they are continuing to publicly talk about it.

And for Tim it isn't a quite of if it's the Argos, it's how can the Argos work:

"To me it's not a debate of whether you do football or not," he added. "It's a debate about if it's the CFL, can you design the stadium so that it grows for the CFL and shrinks back down to its current intimacy for soccer?"

http://www.cbc.ca/sports/soccer/mlse...ting-1.1300961

and they are actively looking at answering the how question (from the same article) :"MLSE is sending people to see other MLS stadiums, to see new designs and technology."

I was simply highlighting why the "if the Arogs come" question is irrelevant. The business case is there and MLSE is active in their due diligence. My gut says if the question being actively considered is "how" does it work, then that's where TFC fans have some leverage to get more out of their current experience. That's where efforts should be, IMO.

[notthesun]

Good article from Molinaro just went up: http://www.sportsnet.ca/soccer/toron...iweke-cfl-mls/

[nascarguy]

this is only one game and yes I would buy a ticket if the price is not too high