Tuesday, March 31, 2015

Vancouver Sun Article Comparing BC Lions and Vancouver Whitecaps

The Vancouver Sun has a good article comparing which team in BC is second to the Canucks in terms of popularity. As someone interested in the economics of the CFL I always find these articles interesting. Some interesting points:

"Nationally, only the $1.3-billion Toronto Maple Leafs and $1-billion Montreal Canadiens of the NHL plus the $920-million Toronto Raptors of the NBA and $870-million Toronto Blue Jays of Major League Baseball are valued as bigger Canadian sport franchises by Forbes."

This was in reference to the Canucks, who are legitimately impressive (although they probably sell less merch than the Roughriders). I'm a little more surprised that the Raptors are worth slightly more than the Blue Jays. 

""The team’s high achievement over time is reflected in its related arena business, which sees Canucks Sports & Entertainment cashing in on the marketing of Rogers Arena as a concert and special-event hub. It is currently the second-biggest arena naming deal in Canada — and one of the top-10 in North America — at $6 million per year."

I'm especially interested in naming rights and $6 million per year isn't chump change (the Ticats naming rights are rumoured to be between $1 and $1.5 million per year).

"Now in their fifth season in Major League Soccer, the Whitecaps are pegged at about $70 million in franchise valuation. That’s almost three times the $27-million price tag accorded the Lions on the strength of their share of the new $40-million CFL television deal struck with TSN two years ago. The Whitecaps are playing before crowds averaging just a little under 21,000 at BC Place Stadium, renovated to the tune of $563 million in 2010-11, compared to about 28,000 for the Lions."

I'm wondering where the $70 million valuation for the Whitecaps comes from. I suppose part of it is they could potentially be moved to the US where maybe there's a floor for franchises. The television money from Canada can't be worth anything, while I'm not sure how much the US television contract is worth, although it is divided amongst a lot of teams. One problem is that with the Canadian dollar down, their player expenses are in US dollars while most of their revenue is in Canadian dollars. Plus while the salary cap in theory is low for the MLS, to compete a team has to splash a lot of money on franchise players (which Toronto FC did last year and still sucked). I can't imagine the Whitecaps are near profitable.

"as long as the CFL on TSN drives average national audiences north of 750,000 per game (including to between 350,000 and 400,000 across B.C. for Lions games). That kind of television platform is huge in an era in which sports sponsorship and advertising is still ratings driven, even in a largely gate-driven league such as the CFL.
 
The Lions hold a significant advantage over the Whitecaps in terms of average television audiences (about 700,000 to 140,000 in 2014). Those numbers will continue to skew in favour of the CFL as long as it has three times the number of Canadian markets (nine) as MLS (three). Every Lions game on TSN attracts viewers from the opposing market, along with hard-core CFL fans tuning in from other markets. On the other hand, only 15 per cent of the Whitecaps games on TSN are against Canadian opponents and the MLS is much more relevant in Vancouver, Toronto and Montreal than it is in the CFL strongholds of Regina, Winnipeg, Edmonton and Calgary."

This is a salient point I've made for a while, that CFL games are always against Canadian teams, while for the vast majority of MLS games, the Canadian teams play US opponents. That obviously hurts television audiences for which large ones are especially appealing for national advertisers who have money. And to be honest, I'm a little skeptical on the 140,000 number for the Whitecaps. I've never seen a Whitecaps number not against a Canadian opponent that high.

Anyways, the article is filled with a lot of interesting numbers including social media numbers. Definitely worth reading in its entirety. 

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