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. 

CFL Ratings on ESPN 2

Searching on Google I found this blog with ratings for ESPN and ESPN 2 for July 22 to 28th. What's interesting for CFL fans is that for ESPN down at ranking 19 there's the CFL (on a Thursday) with 273,000 viewers for three hours. In case you're curious that was a game in Montreal against Edmonton that was won 32 to 27 by the Alouettes.

Those aren't bad numbers, especially considering that ESPN 2 doesn't seem to have a lot of live sports during the summer. Considering that I posted yesterday that last week's Canadian CFL rankings were around 900,000 that's encouraging.

Since the Canadian television deal is around $40 million, could a US television deal be worth $12.3 million proportionately (assuming the $40 million for 900,000 per game versus 276,000)? Probably not, although with rumours that the CFL gets almost nothing for its games shown in the US, they're clearly worth something if shown on a channel with good availability in the US. I haven't seen ratings for the CFL on the the NBC sports channel although they may be lower as the channel is fairly new.

I actually found the blog on this forum, where they make the point that the ratings are higher than MLS on ESPN 2, which is kind of amusing. The forumers make the point that Americans love football and with the first half of the CFL season occurring during a football deficit, the CFL really needs to capitalize on it. Imagine the ratings if Tim Tebow showed up.

Ottawa

So there's an article in the Globe about how the city council isn't sure about investing in a new stadium for Lansdown Park. On the bright side, they seem even less enthused about Eugene Melnyk's rival plans for an MLS franchise based in that exurban hellhole known as Kanata. MLS in Ottawa always seemed to be kind of the last place I thought they would expand and guess what, they didn't.

I hope that Ottawa can get its act together and get a new or refurbished stadium built, especially with the way the feds are spraying around money right now. Ottawa does seem a hard market for the CFL, being a government town and the disappointment of multiple past failures. One upside is the CFL is remarkable stable right now, with, apart from Saskatchewan, a viable salary management system and also seeming to be relatively unaffected by the current recession. Which is more than you can say for the NHL.

Sometimes I wonder if Quebec City isn't a better place for the next team. Ottawa will attract people in the Ottawa area, but it certainly won't be Canada's team. Quebec would probably draw a decent amount of fan interest throughout Quebec outside of Montreal proper. Although then again, it could end up just splitting the fans the Alouettes already have. Seems unlikely Quebec will ever get a stadium in the near future, so Ottawa is probably the only chance for a new CFL team for quite some time.