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G & M - MLSE Too Big?


BuzzAndSting

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Great article from the Globe & Mail today about Maple Leafs Sports & Entertainment. Basically Grange and Shoalts ask if the organization is to big to be able to field competitive teams anymore or are they solely interested in profits.

In the article they point out that with the recent increase to tickets it is now more expensive for a top end TFC ticket ($90) than for a top end Man U ticket ($80).

http://www.theglobeandmail.com/sports/mlse-too-big-to-win/article1736787/

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There is something to be said about an organization that is focused on a single sport and builds a top team with pyramid of supporting teams below it. The word "focused" isn't something that first comes to your mind when you hear about MLSE sport teams. One owner dedicated to one sport is not entirely necessary but keeps everyone below focused.

Hopefully they will get the right people and start to build a serious contender now that the Mo era is over.

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From a purely TFC standpoint would as much headway have been made in the mainstream media if a Ken Horowitz style investor (Miami Fusion for those who only started following the league in 2007) had been the I/O rather than MLSE? People also need to bear in mind that the stadium deal would have died if MLSE hadn't stepped in to fill the funding gap. As for the other sports involved it's maybe worth bearing in mind that Harold Ballard approached the Hamilton Ticats differently from how he handled the Maple Leafs. Probably a mistake to generalize in other words. TFC are still a relatively minor component of MLSE's various holdings that is probably viewed as a long term investment (with a view to soccer eventually being the next NASCAR to move from a niche following to having mainstream appeal) rather than a cash cow in the here and now.

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TFC are still a relatively minor component of MLSE's various holdings that is probably viewed as a long term investment (with a view to soccer eventually being the next NASCAR to move from a niche following to having mainstream appeal) rather than a cash cow in the here and now.

Which is why season ticket prices are stable and low.

Oh, wait.

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No, the extra games account for roughly half of the increase. People have done the math on here (and on other boards) already and shown that there is a per-game increase as well.

The opportunity to watch THIS team more? People apparently have a hard time showing up for the games NOW.

The irony is that now, with condos built, a sports bar opened and plans for a gourmet restaurant under way (called Eleven, for the 11 points on the Maple Leafs logo), the most obvious source of new revenues for the company may be deep playoff runs. Who knows? They may occur just in time for MLSE to launch its own sports network (working title: Real Sports) for which the company has secured a licence.

“Imagine a channel that had Leafs, Raptors, TFC and Marlies games on it,” Peddie muses. “Imagine what you could charge for that.”

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No, the extra games account for roughly half of the increase. People have done the math on here (and on other boards) already and shown that there is a per-game increase as well.

The opportunity to watch THIS team more? People apparently have a hard time showing up for the games NOW.

You can do the math yourself, thanks to this post from the RPB site.

Even in the cheapest seats, the per-ticket increase is only 9.7%. So most of the total 34% increase comes from the 22% increase in the number of games. And except for the bottom two price levels, the additional cost per-game is almost negligible compared to the increase due to the number of games.

(Now personally, I certainly don't see that any price is justified, and it would have been a much smarter move on MLSE's part to not raise any prices, but that's a different issue.)

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The figures I've seen for how much it costs to operate an MLS team have tended to be well over $US 10 million. For example here are numbers for the 2007 season from Forbes magazine:

http://www.bigsoccer.com/forum/showthread.php?t=894455

http://www.forbes.com/2008/09/09/mls-soccer-beckham-biz-sports-cz_kb_0909mlsvalues.html

There isn't the slightest possibility of a separate Canadian league operating at that sort of level financially.

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While I do think that TFC's ticket prices are ridiculous compared to elite clubs around the world, I also understand that MLS is a ticket-revenue league so that's their only true revenue source. Given their ratings, MLS cannot possibly make good money through tv contracts. Clubs in Europe make a significant amount of money via television contracts, so they are able to have a little more flexibility in their ticket pricing.

That said, I think your ticket prices should reflect your product. A out-of-playoff team in MLS has no business having its average ticket prices compared to teams like ManU.

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Capitalism at its finest. MLSE took the risk to set up shop and has every right to charge whatever it wants. Personally I find it ridiculous that they would raise ticket prices when they essentially have failed to reach the playoffs in all the years of its TFC operation.

But I also find it ridiculous that anyone would compare ticket prices of ManU or Chelsea to TFC. Compared to other MLS teams, TFC prices are on the upper end of the MLS scale, but less than say LA Galaxy. It's really about what the market would bear. As a fan you should voice your displeasure about the product : the price of your entertainment value. You have that right, as well as the right to refuse to buy a ticket.

While it's a disappointing year, TFC really has done okay: placing fourth or fifth in the East, being Voyageurs Cup Champions, and doing relatively well in the CONCACAF Champions League. Don't know it that's enough to raise ticket prices, though.

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While it would have been a far smarter decision to hold the cost-per-game costs this year and failing to do so likely represents a miscalculation by MLSE...

People have GOT to stop pulling out the "it costs more to watch TFC than Manchester United' line because, well, it's completely inaccurate.

The pink class tickets at BMO are more expensive than the higest level available for public sale at Old Trafford. However, there is no direct comparison to the BMO pinks at Old Trafford. Therefore that Globe article was comparing apples to oranges.

The second tier pricing at BMO is about the same as the top tier available to the public at Old Trafford and every other price point at Old Trafford is more expensive. At the low end it is TWICE as expensive at Old Trafford than at BMO Field.

Yesterday I checked the single game prices at Stoke City (I was having this same discussion on Twitter with someone). Low end single game cost at BMO is $24. At Stoke City, for their B class games, in the family section, the cost was $40. So, again, NO CHEAPER TO WATCH EPL THAN TFC.

MLSE should have held costs this year, especially when they knew the sticker price would go up with the increased games. But, that doesn't mean we should continue to spread false information.

For the vast majority of people watching TFC, it is much cheaper than it would be to watch the EPL.

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As i pointed out in another thread about this, the exchange rate has traditionally been $2CDN= 1GBP and currently that has dropped to $1.60 so the price of anything (including tickets) in England relative to Canada has become cheaper. Take that 40GBP Spurs ticket and apply the traditional exchange rate and it becomes an $80 ticket. ManU's 900GBP high-end Season ticket now becomes $1800 instead of $1400-something.

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The comparison to the cost of tickets in Europe is interesting, but in the end it isn't the big issue.

The real problem is that TFC is a poorly run team, without a real leader and without any real onfield success. Despite this it has raised ticket prices again, is forcing its season ticket holders to take an MLS Cup ticket and is forcing them to pay months in advance for tickets they may never see (CCL tickets). They are also asking for a lot more money upfront compared to the season before.

Essentially, TFC is asking its season ticket holders to take a tremendous leap of faith that they will turn things around. People have to give up their money before they even know who will be running the team.

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The figures I've seen for how much it costs to operate an MLS team have tended to be well over $US 10 million. For example here are numbers for the 2007 season from Forbes magazine:

http://www.bigsoccer.com/forum/showthread.php?t=894455

http://www.forbes.com/2008/09/09/mls-soccer-beckham-biz-sports-cz_kb_0909mlsvalues.html

There isn't the slightest possibility of a separate Canadian league operating at that sort of level financially.

Initially no. Well, outside of the big three, the teams wouldn't be able to operate at that level initially.

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The comparison to the cost of tickets in Europe is interesting, but in the end it isn't the big issue.

The real problem is that TFC is a poorly run team, without a real leader and without any real onfield success. Despite this it has raised ticket prices again, is forcing its season ticket holders to take an MLS Cup ticket and is forcing them to pay months in advance for tickets they may never see (CCL tickets). They are also asking for a lot more money upfront compared to the season before.

Essentially, TFC is asking its season ticket holders to take a tremendous leap of faith that they will turn things around. People have to give up their money before they even know who will be running the team.

+ 1...

I don't think the article is comparing tickets prices in referance to play on the field, more a club that is in shambles in NA compared to one of the greatest clubs in the world. How could the ticket prices be even comparable?

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No, I'm advocating that people quit whining incessantly as if stuff that gets posted online will make a blind bit of difference on this and simply decide whether they want to continue being a supporter or not. The reality is that MLSE got their pricing wrong in 2007 where the south end is concerned because pre-Beckham signing announcement when prices were set they didn't think they would sell out (know that for a fact based on things I was told that by TFC employees at early fan group gatherings). I also suspect that they simply didn't grasp that "endzone" seats would have considerably greater appeal in a soccer context than they would in a conventional North American sports league like the CFL.

I use Scotland as a frame of reference because that's where I grew up. $11 a game gets you into a regional semi-pro game there usually more or less comparable to the CSL in playing standards and drawing similar crowds to a TFC Academy game (i.e. in the dozens rather than the thousands). That was way underpriced for a top tier full-time professional league like MLS with continental scale travel involved and anyone who thought that was anything other than an introductory offer was dreaming in technicolour, in my opinion. $20 a game is much more realistic particularly with three top notch DPs (fingers crossed on that anyway but the fact approval for Izaguirre as well as Mista was there is a very good sign), an experienced coach and GM (if lots of people don't renew we could wind up being stuck with Dasovic and Cochrane on that) and a $15 million state of the art practice facility to pay for over the next few seasons.

If there were no signs of increased expenditures on and off the field of play and it looked like a straightforward case of maximizing corporate profits I would be less than impressed by price rises but I just don't see it that way at the moment. All I see is a group of hockey execs still struggling to get their head around how to build a successful soccer franchise, who are genuinely trying to operate TFC at a different level from franchises like the New England Revolution and FC Dallas. I strongly suspect that TFC is still being viewed as a long term investment by MLSE rather than a Toronto Maple Leafs style cash cow at this point.

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If there were no signs of increased expenditures on and off the field of play and it looked like a straightforward case of maximizing corporate profits I would be less than impressed by price rises but I just don't see it that way at the moment. All I see is a group of hockey execs still struggling to get their head around how to build a successful soccer franchise, who are genuinely trying to operate TFC at a different level from franchises like the New England Revolution and FC Dallas. I strongly suspect that TFC is still being viewed as a long term investment by MLSE rather than a Toronto Maple Leafs style cash cow at this point.

That's a fair assessment of where disappointment begins. You're more kind to the TFC staff than others, but I think we all want to see MLSE treat TFC as a long term investment.

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there is no such as being too big. We must look at their objectives; we can safely say that they have two: profits and putting out a good product. However, the latter is of greater importance. MLSE is basically a pension fund with thousands of beneficiaries who care more about their monthly income than a stanley cup or mls cup and rightfully so. As for their biggest asset, the leafs, they reach their profit apex every year and the raptors are an expense they have to keep in order to run one of most used arenas in the world. Consequently, TFC is only but a small part of their operation and usually put on the back burner. So that said, Torontonians, Hang in there, you will a championship one day; notwithstanding the NCC.

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