Argos to BMO decision - Wednesday, May 20th

[105]

The Argos are just a TV play at this point. As long as Bell has a TV stake in the CFL, the Argos will be propped up regardless if they sell out BMO or get 500 fans to the games.

The Argos aren't considered big league and that's why they are an afterthought and will continue to be an afterthought in Toronto regardless of where they play. They'd be better off in a suburb of Toronto, but nobody is crazy enough (and rightly so) to spend millions of their own money to build a stadium for a team that will lose money every year.

[Onyx]

The time spent on sales, marketing and ops for those teams is going to spread people thinner - there will be additional staff in sales, marketing and opps. They can't do both CFL and CPL at the same time - the jobs are a tad more intricate then that. There will be overlap but its not like CFL marketing staff will be able to drop their summer work.


GM/Coach

Assistants

Fitness Staff

18 players (I'm assuming a smaller roster)



******

This isn't going to be cheap. The labour budgets are going to be in the millions.

Back office (ticketing, sponsorship, accounting, gameday ops) - in place, but will be spread thinner due to seasons overlapping

front office & Team (GM, Coach, training staff) - all new, all incremental cost

No way salary cap is $2m -- $1m at most. the roster will earn USL/NASL wages. I assume they used the fury as "model" on how all these teams will be run.

[105]

TV numbers tend to be overrated unless of course your the broadcaster who owns the rights to the programming.

Loads of people can watch the Argos on TV every game but if nobody buys tickets or merchandise, the franchise is going to lose money, like the Argos have.

Loads of people watch curling / darts / poker on TV, but they aren't going to spend loads of money to buy tickets or merchandise for these events. Some things are strictly made for TV events. And in Toronto and in much of Canada, that's what the CFL has become, a TV event.

[Onyx]

I read that breakeven in CFL is now upper-teens per game, with their big TV deal with TSN.
Argos will make money as long as they acheive that. Huge operating leverage (big profit to big losses) in sports business.

Let say 18k is break even
If they sellout year one like some people on here think, (500*8,000people over breakeven) they will make $4million. Plus $9million on grey cup. Plus their sponsorships will go way up due to MLSE running the show.

Let say they get 13,000k per game (500*5000people under breakeven) they will lose $2.5m. Probably make it up on sponsorship increase that MLSE brings. Grey cup profit covers losses for next 4 years.

[Onyx]

people here should be more worried about how TFC is doing?
Our salary costs has gone from:
2013 US$4m = C$4m
2016 US$20m = C$29million

Thats a C$25million jump in 3 years.
How is the club paying for it
- has attendance increased since 2013. No, # of "actual butts in seats" is the same as before at 20-21k = $0
- 16 more suites - they seem to be empty most games, but if they are paid for (80k*15) = only +$1.2M
- more SUM money = +$3m
- loss of shirt sponsor = -C$4million

Don't see any real increase in revenues to cover the C$25million increase in costs. I assume this is why TL is toast now, among other things.

[Ivy]

people here should be more worried about how TFC is doing?
Our salary costs has gone from:
2013 US$4m = C$4m
2016 US$20m = C$29million

Thats a C$25million jump in 3 years.
How is the club paying for it
- has attendance increased since 2013. No, # of "actual butts in seats" is the same as before at 20-21k = $0
- 16 more suites - they seem to be empty most games, but if they are paid for (80k*15) = only +$1.2M
- more SUM money = +$3m
- loss of shirt sponsor = -C$4million

Don't see any real increase in revenues to cover the C$25million increase in costs. I assume this is why TL is toast now, among other things.

I can see what you're trying to do, but the math is nowhere near as simple as that. There are hundreds of X factors, other than ticket sales and shirt sponsors.

[Beach_Red]

Scary part is that their TV numbers are dropping while NFL TV numbers are growing in Canada (especially if you look at demographic where younger generation only watch NFL to get their gridiron fix). If this trend continues, then CFL will be have even harder time to survive. I think CFL trolls should troll NFL forums instead of soccer ones since NFL is bigger threat to CFL's survival than soccer.

Soccer is completely different sport with different demographic. Only people who care about Argos and CFL in general are old Canadians (or in Stephen Harper's words. "old-stock Canadians"). More multicultural Canada becomes, tougher it will be for CFL to survive (we are already seeing that in Toronto). This is why soccer is growing to a point that CFL owners are working with CSA to form all Canadian soccer league.

Why do you think the NFL ratings are going up? Is that also because of new Canadians? Is the NFL a threat to CFL teams because fans will watch those games on TV and stop going to CFL games and watching them on TV?

I think you're right about all this, by the way, but I wonder if MLS won't just become the soccer version of the CFL in another 15 years? Sure, soccer is very popular, but as you've said, so is the NFL and it's is getting even more popular. MLS won't be the top league in the world, there will always be better games on TV. Like the CFL the MLS is sort of the same as other leagues but has its own, unique rules. I wonder how long it will take before MLS owners change the structure of the league to be like other leagues?

[105]

people here should be more worried about how TFC is doing?
Our salary costs has gone from:
2013 US$4m = C$4m
2016 US$20m = C$29million

Thats a C$25million jump in 3 years.
How is the club paying for it
- has attendance increased since 2013. No, # of "actual butts in seats" is the same as before at 20-21k = $0
- 16 more suites - they seem to be empty most games, but if they are paid for (80k*15) = only +$1.2M
- more SUM money = +$3m
- loss of shirt sponsor = -C$4million

Don't see any real increase in revenues to cover the C$25million increase in costs. I assume this is why TL is toast now, among other things.

They bought the team for 10 mill. It's worth close to 200 now.

I don't think they all that worried.

[Onyx]

They bought the team for 10 mill. It's worth close to 200 now.

I don't think they all that worried.

because some writer at forbes said its worth $175m. LOL!
I don't think anyone in business world puts much stock in forbes values. Fun to talk about but not real

its only worth what a third party is willing to pay.

[Ivy]

because some writer at forbes said its worth $175m. LOL!
I don't think anyone in business world puts much stock in forbes values. Fun to talk about but not real

its only worth what a third party is willing to pay.

Im confused at what you're getting at?
Consider the current cost of entering a new franchise into MLS, TFC's player contract sale prices, facilities, branding price, game day revenue, and sponsorship dollars... You don't think there would be buyers if MLSE decided to sell at 175m? I think they could get a lot more.

[Gazza_55]

because some writer at forbes said its worth $175m. LOL!
I don't think anyone in business world puts much stock in forbes values. Fun to talk about but not real

its only worth what a third party is willing to pay.

You're right. MLSE would never sell TFC for $175m. I don't even think they would even consider it until a bid was in the $300m range.

[Super]

people here should be more worried about how TFC is doing?
Our salary costs has gone from:
2013 US$4m = C$4m
2016 US$20m = C$29million

Thats a C$25million jump in 3 years.
How is the club paying for it
- has attendance increased since 2013. No, # of "actual butts in seats" is the same as before at 20-21k = $0
- 16 more suites - they seem to be empty most games, but if they are paid for (80k*15) = only +$1.2M
- more SUM money = +$3m
- loss of shirt sponsor = -C$4million

Don't see any real increase in revenues to cover the C$25million increase in costs. I assume this is why TL is toast now, among other things.

They needed to make a huge investment in players and stadium to prevent the club from imploding. I remember tons of games with less than 10,000 people, and it was fast becoming the most depressing place to watch "entertainment" in the city. TL in many ways saved Toronto FC.

[Kaz]

because some writer at forbes said its worth $175m. LOL!
I don't think anyone in business world puts much stock in forbes values. Fun to talk about but not real

its only worth what a third party is willing to pay.

First is that the team has said flat out they would be loosing money for a few years, with the new Stadium upgrades. Say average ticket is $50 that 19 million last year just from Ticket Sales. You take some from Concessions, Shirt Sales, Shirt Sponsor, Sideline Sponsors, Beer Sponsor, Secondary Sponsors. Then you add in money from the US TV deal, the Canadian TV deal, League Sponsor Deals and Profit sharing.

If you take 4 million from a TV deal, 19 million for seat sales (just regular season, not including CC or CL) 4 million (assuming) for a new shirt sponsor. That alone is nearly 28 million. You add in sponsor on the board, Kia, Budweiser, Concessions, Shirt Sales, and the Canadian TV deal, I'm think TFC is covering payroll. Particularly as MLSE knew a head of time that they wouldn't make a profit for the first few years. You add in the Profit from a Winter Classic or two and it is no biggy. Bring Attendance up to 25,000 a season and it isn't so bad at that point, Particularly if the Dollar Strengthens a little.

And none of those numbers take into account that there were SSH last year that didn't come out to every game as such actual tickets sold was likely closer to an average of 25,000 anyway.


I wouldn't worry much.

[105]

because some writer at forbes said its worth $175m. LOL!
I don't think anyone in business world puts much stock in forbes values. Fun to talk about but not real

its only worth what a third party is willing to pay.

Usually Forbes values are UNDER what teams sell for.

[Phil]

They bought the team for 10 mill. It's worth close to 200 now.

I don't think they all that worried.

This right here. That evaluation given the initial investment makes this a pony worth betting on for MLSE. Merchandise, ticket sales, TV contracts, Sponsors, game day sales all prop up the value of this franchise. One that had minimal investment, that has a tightly regulated salary cap system as we play rent free in a stadium for free. To a business like MLSE that is dollar signs everywhere.

[mistercorporate]

Onyx's #'s don't make sense. Also, MLSE is already on record saying TFC will be making $50mil in revenue this year. Our attendance this year should also be just north of 25,000 based on growth the last couple years (1500-2000 seat bump).

[Oldtimer]

Onyx's #'s don't make sense. Also, MLSE is already on record saying TFC will be making $50mil in revenue this year. Our attendance this year should also be just north of 25,000 based on growth the last couple years (1500-2000 seat bump).

$50mil after the DPs? Wow. That's crazy money for a franchise that cost MLSE $10 million.

[Pint]

$50mil after the DPs? Wow. That's crazy money for a franchise that cost MLSE $10 million.

Revenue not profit... 50mil in Rev should make them a couple mil

[Yohan]

Onyx's #'s don't make sense. Also, MLSE is already on record saying TFC will be making $50mil in revenue this year. Our attendance this year should also be just north of 25,000 based on growth the last couple years (1500-2000 seat bump).

Do you have a source? I find this number to be nuts.

[mistercorporate]

Do you have a source? I find this number to be nuts.

Just quickly google searched it (as I initially saw it in a broadcast interview):

http://www.thestar.com/sports/tfc/2015/05/07/tim-leiweke-races-to-finish-what-he-can-before-time-runs-out-arthur.html

"And while the pitch remains a concern, the building will make Toronto FC rich. There are already 20,000 season ticket holders, and he projects over $50 million in revenue this year, and $60 million next year, an MLS first."

http://www.wakingthered.com/2015/2/13/8033503/buying-wins-in-toronto

"TFC is expecting season seat renewals even still, and they’re expecting to sell a reported 4,000 more. With the BMO expansion, a potentially lucrative shirt sponsorship - whether with BMO or otherwise - and a $50 Million revenue projection for 2015, there’s no real limit to what TFC can spend."

So yeah, all that talk of losses only apply when amortizing stadium and training facility costs into our revenue (yes, that means we paid for the stadium). In terms of cashflow, we're doing pretty damn good and we smoke the CFL teams (the government supported Sask Welfare Riders only make $40mil), most of the teams in that league lose money. People don't realize how many seats are actually paid for by corporate sponsors. Rogers is one of our biggest sponsors but they do it in a very low profile way, many of our season seats are held by them.

[ensco]

Just quickly google searched it (as I initially saw it in a broadcast interview):

http://www.thestar.com/sports/tfc/2015/05/07/tim-leiweke-races-to-finish-what-he-can-before-time-runs-out-arthur.html

"And while the pitch remains a concern, the building will make Toronto FC rich. There are already 20,000 season ticket holders, and he projects over $50 million in revenue this year, and $60 million next year, an MLS first."

http://www.wakingthered.com/2015/2/13/8033503/buying-wins-in-toronto

"TFC is expecting season seat renewals even still, and they’re expecting to sell a reported 4,000 more. With the BMO expansion, a potentially lucrative shirt sponsorship - whether with BMO or otherwise - and a $50 Million revenue projection for 2015, there’s no real limit to what TFC can spend."

I spent multiple posts taking that number apart at the time Leiweke said it. It's ridiculous. It requires you to believe that TFC get Leaf/Raps/Blue Jays type marketing/sponsorship dollars. Which they don't.

This is easy to figure out. You can't get much north of $20M in revenues via ticket sales - multiply 20000 seats by $40 by 18 games and you get less than $15M. TV is basically worthless in MLS, so far, go look at the ratings thread. Jerseys are definitely worth something, a couple of million maybe. Food, beer, let's say $20M total from everything ex sponsorships.

I found the idea that TFC can get $30-40M a year in sponsorship dollars to be .... not credible, at a minimum. That revenue line item is driven by TV numbers.

The average NHL team does $15M a year in sponsorship revenue. If TFC does $10M, that would be outstanding.

Note that the jersey sponsorships, by far the most valuable, were less than $5M per season for TFC 5 years ago (it's hard to get real time data on this stuff). The current inability of the team to get a new sponsor signed on terms MLSE like is not exactly a sign that people are falling all over themselves to sponsor TFC.
http://www.sportspromedia.com/news/t...rt_sponsorship

[OgtheDim]

The average NHL team does $15M a year in sponsorship revenue. If TFC does $10M, that would be outstanding.

...

And then there's Phoenix.


I agree with you. No way TFC does $50 million in revenue.

[Wagner]

I spent multiple posts taking that number apart at the time Leiweke said it. It's ridiculous. It requires you to believe that TFC get Leaf/Raps/Blue Jays type marketing/sponsorship dollars. Which they don't.

This is easy to figure out. You can't get much north of $20M in revenues via ticket sales - multiply 20000 seats by $40 by 18 games and you get less than $15M. TV is basically worthless in MLS, so far, go look at the ratings thread. Jerseys are definitely worth something, a couple of million maybe. Food, beer, let's say $20M total from everything ex sponsorships.

I found the idea that TFC can get $30-40M a year in sponsorship dollars to be .... not credible, at a minimum. That revenue line item is driven by TV numbers.

The average NHL team does $15M a year in sponsorship revenue. If TFC does $10M, that would be outstanding.

Note that the jersey sponsorships, by far the most valuable, were less than $5M per season for TFC 5 years ago (it's hard to get real time data on this stuff). The current inability of the team to get a new sponsor signed on terms MLSE like is not exactly a sign that people are falling all over themselves to sponsor TFC.
http://www.sportspromedia.com/news/t...rt_sponsorship

I always appreciate your posts.

[Onyx]

I spent multiple posts taking that number apart at the time Leiweke said it. It's ridiculous. It requires you to believe that TFC get Leaf/Raps/Blue Jays type marketing/sponsorship dollars. Which they don't.

This is easy to figure out. You can't get much north of $20M in revenues via ticket sales - multiply 20000 seats by $40 by 18 games and you get less than $15M. TV is basically worthless in MLS, so far, go look at the ratings thread. Jerseys are definitely worth something, a couple of million maybe. Food, beer, let's say $20M total from everything ex sponsorships.

I found the idea that TFC can get $30-40M a year in sponsorship dollars to be .... not credible, at a minimum. That revenue line item is driven by TV numbers.

The average NHL team does $15M a year in sponsorship revenue. If TFC does $10M, that would be outstanding.

Note that the jersey sponsorships, by far the most valuable, were less than $5M per season for TFC 5 years ago (it's hard to get real time data on this stuff). The current inability of the team to get a new sponsor signed on terms MLSE like is not exactly a sign that people are falling all over themselves to sponsor TFC.
http://www.sportspromedia.com/news/t...rt_sponsorship

Here is what i believe are TFC financials.
All numbers are in C$ (not US$). A got the 2013 from published reports/press but had to guess a bit on sponsorship (ie. they were making $2-3m per year pre-defoe). I have revenue in mid-30s C$ ... which is probably high.
Projected them to 2016 (additional eastside suites, loss of shirt sponsor, increase in SUM, increase in salaries) :

in C$000s		2013		2016		change
Gate		16000		16000		0
Suites		2000		3200		1200
Sponsorship		10000		6000		-4000
TV/SUM		1000		4500		3500
Concessions/Gameday		6000		6000		0
Player salaries		-4000		-29000		-25000
Operations/academy expenses		-18000		-18000		0
Adminstration costs		-6000		-6000		0
Gamday expenses		-4000		-4000		0
Profit / Loss		3000		-21300		-24300

[Beach_Red]

This right here. That evaluation given the initial investment makes this a pony worth betting on for MLSE. Merchandise, ticket sales, TV contracts, Sponsors, game day sales all prop up the value of this franchise. One that had minimal investment, that has a tightly regulated salary cap system as we play rent free in a stadium for free. To a business like MLSE that is dollar signs everywhere.

Luckily it doesn't matter what the team is worth, because it's really only of value to MLSE. That TV contract is the most important thing and they are both the buyer and the seller, no other owner would be in that position.

[TFC/Everton]

Here is what i believe are TFC financials.
All numbers are in C$ (not US$). A got the 2013 from published reports/press but had to guess a bit on sponsorship (ie. they were making $2-3m per year pre-defoe). I have revenue in mid-30s C$ ... which is probably high.
Projected them to 2016 (additional eastside suites, loss of shirt sponsor, increase in SUM, increase in salaries) :

in C$000s		2013		2016		change
Gate		16000		16000		0
Suites		2000		3200		1200
Sponsorship		10000		6000		-4000
TV/SUM		1000		4500		3500
Concessions/Gameday		6000		6000		0
Player salaries		-4000		-29000		-25000
Operations/academy expenses		-18000		-18000		0
Adminstration costs		-6000		-6000		0
Gamday expenses		-4000		-4000		0
Profit / Loss		3000		-21300		-24300

So much wrong in here.

[Gazza_55]

Here is what i believe are TFC financials.
All numbers are in C$ (not US$). A got the 2013 from published reports/press but had to guess a bit on sponsorship (ie. they were making $2-3m per year pre-defoe). I have revenue in mid-30s C$ ... which is probably high.
Projected them to 2016 (additional eastside suites, loss of shirt sponsor, increase in SUM, increase in salaries) :

in C$000s		2013		2016		change
Gate		16000		16000		0
Suites		2000		3200		1200
Sponsorship		10000		6000		-4000
TV/SUM		1000		4500		3500
Concessions/Gameday		6000		6000		0
Player salaries		-4000		-29000		-25000
Operations/academy expenses		-18000		-18000		0
Adminstration costs		-6000		-6000		0
Gamday expenses		-4000		-4000		0
Profit / Loss		3000		-21300		-24300

Not to get too far off topic in this thread but your TV/SUM 2016 number is questionable and the player salaries (if you are implying -29000 means $29m) is about $7m too high.

[Onyx]

Not to get too far off topic in this thread but your TV/SUM 2016 number is questionable and the player salaries (if you are implying -29000 means $29m) is about $7m too high.

TV/SUM:
US US$90M* 75% = US$67.5m MLS's share / 20 teams = US$3.3m => in C$ 4.5m.
Cdn TSN deal is profit sharing deal .. TSN loses money on its MLS coverage.

salaries:
its in C$. US$21m is C$29m .. might be low if its US$22

[mistercorporate]

The seat sale #'s seem to be completely off the mark too. While I appreciate your effort to calculate the total revenue, I have no idea where you're getting the numbers from. Everything I've seen suggests average attendance of 23,500+ last season and a club record, while 2013 had the worst attendance in club history. I expect 2016 attendance and ticket sales to be even higher than 2015.

[Gazza_55]

TV/SUM:
US US$90M* 75% = US$67.5m MLS's share / 20 teams = US$3.3m => in C$ 4.5m.
Cdn TSN deal is profit sharing deal .. TSN loses money on its MLS coverage.

salaries:
its in C$. US$21m is C$29m .. might be low if its US$22

First, the TV money alone is $90m. Where is the revenue made from SUM?

Second, TFC only pays for DP salaries above the DP threshold ($435k I believe).
So they MLSE pays Giovinco $7.1m, Bradley approx $6.5m (word is he took a cut) and Altidore $4.7m minus approx $1.3m ($435k x 3 DP's). The league pays the rest.