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CPL new teams speculation

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18 minutes ago, baulderdash77 said:

The increase in expansion fee is interesting.  Getting a franchise gets a share in CSB and it sounds like the national sponsorship deals really increases that value.  

A larger expansion fee is going to make it hard to start up in the smaller markets for sure.  There may be a race to 10-12 teams and then a slow down in expansion of that’s true.

I always had a doubt about much more than 12 or 14 teams anyways because the budgets required for a good product will need a good gate and corporate sponsors.  We will have to see.

The best open markets remain  East GVA, Laval, Ottawa Quebec City and one of the Saskatchewan cities.  We seem to hear more of these smaller centres and I think they will have a hard time making the economics of a team work.

I think a larger expansion fee is good because it hopefully keeps away people that don’t really have deep pockets, you want people with deep pockets coming into the league and who then will hopefully be in for the long run and not bail at the first sign of any financial problems.

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I'm going to guess that the expansion fee inflation is a very real sign that these sponsorships are delivering cash money to the club's.  Pretty good money I'd guess.

Shouldn't discourage expansion too much I'd think.  Enterents who are otherwise qualified will likely use their "share" of that revenue against the expansion fee.  Might take a few years to pay off the league and access that revenue.  Speculation of course.

Alternatively, the fees have simply got up because that's what the league thinks the market now demands.

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I just wonder what this does for the possibility of an Ottawa Fury bid to join CPL. They might consider the cost prohibitive now, concidering how much money they're losing per season. I wonder if they joined if they would be in for a portion of the media rights revenue?

Edited by Initial B

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6 minutes ago, Initial B said:

I just wonder what this does for the possibility of an Ottawa Fury bid to join CPL. They might consider the cost prohibitive now, concidering how much money they're losing per season. I wonder if they joined if they would be in for a portion of the media rights revenue?

To me, if this is true, it pretty much confirms Rollins' speculation last week that OSEG will fold the Fury rather than join the CPL. Despite all the money Greenberg, Ruddy and Shenkman have I don't see them having an appetite to spend another $8M.

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28 minutes ago, baulderdash77 said:

...The best open markets remain  East GVA, Laval, Ottawa Quebec City and one of the Saskatchewan cities.  We seem to hear more of these smaller centres and I think they will have a hard time making the economics of a team work.

Not sure why the Sakatchewan cities get taken so seriously as being more than "smaller centres". Guess you maybe need to be a CFL fan to see things that way, but think it's a mistake to lose sight of the fact that K/W and London are both significantly bigger than Saskatoon in population terms. 

2 minutes ago, Cheeta said:

I'm going to guess that the expansion fee inflation is a very real sign that these sponsorships are delivering cash money to the club's.  Pretty good money I'd guess...

I think Bobby McMahon speculated it would be a $20 million expansion fee, if the Mediapro deal was as good as some people were implying. Would be interesting to see his take on this. A $5 million increase in the franchise fee implies that significant revenue is flowing from the various CSB deals to the clubs that own a share in it, so the existing clubs have to be compensated for taking a smaller slice of those revenues in the years ahead.

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51 minutes ago, Ozzie_the_parrot said:

Not sure why the Sakatchewan cities get taken so seriously as being more than "smaller centres". Guess you maybe need to be a CFL fan to see things that way, but think it's a mistake to lose sight of the fact that K/W and London are both significantly bigger than Saskatoon in population terms. 

Saskatoon and Regina combined are smaller than the Region of Waterloo. We also have like 6 million people within and 1-1.5 hr drive of the uptown-downtown corridor. From a travel expense-sustainability point of view I imagine they start with London or Mississauga because of their high traffic airports though. Region of Waterloo International currently has 1 flight a day arriving from out of province while London has multiple, with frequent arrivals from Pearson too. 

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3 hours ago, baulderdash77 said:

The increase in expansion fee is interesting.  Getting a franchise gets a share in CSB and it sounds like the national sponsorship deals really increases that value.  

A larger expansion fee is going to make it hard to start up in the smaller markets for sure.  There may be a race to 10-12 teams and then a slow down in expansion of that’s true.

I always had a doubt about much more than 12 or 14 teams anyways because the budgets required for a good product will need a good gate and corporate sponsors.  We will have to see.

The best open markets remain  East GVA, Laval, Ottawa Quebec City and one of the Saskatchewan cities.  We seem to hear more of these smaller centres and I think they will have a hard time making the economics of a team work.

I think once you are past the 10-12 teams that would make up D1, the speculation surrounding D2 becomes much more viable - and this would entail a much lower entry cost.  There are issue with how this gets split early on, but its not like we would want to continue to populate a massive D1 structure indefinitely.  

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5 hours ago, Ozzie_the_parrot said:

Not sure what to make of this on reddit and what it would do to the expansion process if true:

Will be interesting to see if any new clubs will be added to pro membership at the CSA AGM. In procedural terms this is when any group would normally need to be added for a 2020 launch, and only Saskatoon appears to be far enough along on that where what is happening publicly is concerned.

Montopoli was likely sad that it wasn't 100% sold out despite the tickets being free

If the leagues revenues are higher than projected, that means that the league's value is higher... it's only natural that expansion fees goes up as well.

The league's in its infancy but people need to realize that the business behind it seems rock solid. 

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30 minutes ago, Ansem said:

Montopoli was likely sad that it wasn't 100% sold out despite the tickets being free...

That was my thought as well when I first read that. The turnout wasn't bad by any stretch of the imagination, but they did a bad job on managing expectations by announcing that there would be 25,000 + there when they really were not in a solid position to gauge that in advance given free tickets were likely going to people with only a marginal interest in the sport.

The reason that this sort of expansion fee is a questionable strategy, if accurate, is that they really do need to get up to around 10 teams to be stable and to get into all the markets they need to be in to maximize their appeal to sponsors. Putting all the pieces together and finding suitable stadiums is challenging enough that you probably don't want to be scaring away any groups that would be a major asset moving forward by forcing them to commit to spending north of $10 million before a ball is kicked in anger.

Maybe the prospect of the Ottawa Fury getting in at a relatively low expansion fee sticks in the craw with some of them, or getting just over $1 million when the next team signs on is seen as providing a strong incentive to keep all of the original risk taking seven in place, if crowds are not quite what they hoped for this season in certain markets (that will be very much self-inflicted if it happens in Calgary's case where the amount of blue dots for the game next Wednesday is looking a bit alarming).

Edited by Ozzie_the_parrot

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31 minutes ago, Ozzie_the_parrot said:

That was my thought as well when I first read that. The turnout wasn't bad by any stretch of the imagination, but they did a bad job on managing expectations by announcing that there would be 25,000 + there when they really were not in a solid position to gauge that in advance given free tickets were likely going to people with only a marginal interest in the sport.

Weather had a lot to do with it. Loved the game and atmosphere but it was really windy and cold that day.

32 minutes ago, Ozzie_the_parrot said:

The reason that this sort of expansion fee is a questionable strategy, if accurate, is that they really do need to get up to around 10 teams to be stable and to get into all the markets they need to be in to maximize their appeal to sponsors. Putting all the pieces together and finding suitable stadiums is challenging enough that you probably don't want to be scaring away any groups that would be a major asset moving forward by forcing them to commit to spending north of $10 million before a ball is kicked in anger.

Actually, it's an excellent way to weed out week investors group. Nothing short than deep pockets willing and able to lose money for years shouldn't be allowed to begin with. 

Slow expansion is better than teams folding

34 minutes ago, Ozzie_the_parrot said:

Maybe the prospect of the Ottawa Fury getting in at a relatively low expansion fee sticks in the craw with some of them, or getting just over $1 million when the next team signs on is seen as providing a strong incentive to keep all of the original risk taking seven in place, if crowds are not quite what they hoped for this season in certain markets (that will be very much self-inflicted if it happens in Calgary's case where the amount of blue dots for the game next Wednesday is looking a bit alarming).

If Ottawa didn't want to get in at a cheap fee, they certainly won't now. They didn't believe in the project or that they could fit in it. No leagues want owners who aren't all in anyways.

As for Calgary, we'll judge on what we see on Saturday 

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I am totally against inflated expansion fees, it defeats the purpose of the league and the goal of expansion. It to everyone's benefit to have more teams, 7 is silly, ten would be fair, a dozen about right. Everyone up to 12 should be a founding partner and should be welcomed at only a slightly higher expansion fee outlay.

The fact is, if you have a team in Québec, what does it do? Suck value out of the league, or add to it? 

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20 minutes ago, Unnamed Trialist said:

I am totally against inflated expansion fees, it defeats the purpose of the league and the goal of expansion. It to everyone's benefit to have more teams, 7 is silly, ten would be fair, a dozen about right. Everyone up to 12 should be a founding partner and should be welcomed at only a slightly higher expansion fee outlay.

The fact is, if you have a team in Québec, what does it do? Suck value out of the league, or add to it? 

Having weak ownership isn't better either. See it like this.

There's supposedly 5 bids in Quebec. A higher expansion fee might encourage ownerships to partner up, strengthening the team's ownership overall.

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If it is at 8 millions that isn't an insane amount of money and it can be structured where it isn't an immediate capitol expenditure.  Future league revenue can finance your way into the league.  Of course that means an 8 million dollar revenue stream is spoken for but still, you get the idea.  If you where a qualified expansion candidate at $1M, you're still a qualified candidate at $8M because 6 months ago I don't think ANYONE was expecting any sort of league revenue trickling down to the clubs. 

The need to reach a critical  mass of teams is important, very important, but I have a difficult time not recognizing the risk these 7 founding organizations took to get this damn project out of the board room and into the stadiums.  Took?  Hell, taking, we're two matches in.  This experiment is far from a written result yet.   

Joe Blow's Kickers wouldn't have any league to join in the 1st place if it wasn't for the courage of others.  Choosing not to stick your neck out sometimes comes with a cost too. So there!

P.S.  Without any knowledgable insight I've always felt London is an A+ candidate for this league.  Populations, income, demographics.  From what I think I know of the region I could see a properly marketed team becoming a bedrock in a league like the CPL.   Truly.  A different sort of market than say Winnipeg or Edmonton or Halifax but a large enough self-sufficient market all the same.     

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4 hours ago, Ansem said:

Not sure if that was posted but it looks good for Saskatchewan 

 

I think you're misinterpretating that, SMF Field have a seating capacity of 3,940, over 4K with standing room and the grass etc. Joe Belan from the ownership group said they are doing this to see what kind of response they get. Overwhelming support being best case scenario, very few and somewhere in between. But if they want a professional team they need to do better than 1,900. I really want Saskatchewan to fill that void in the CanPL Map and be in this league, their population of 240,000 isn't a strong point but they really get behind their teams, not just the riders but junior hockey and lacrosse team rush that's playing in the NLL. Saskatoon just got a CEBL Team too for 2019

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I heard on TSN1150 Hamilton that the Sask CEBL team is selling extremely well too.

 

I agree about London being solid. Could be the "Riders" of the CPL. I also go as far as to wonder about adding London and KW at the same time, for the ffect they would have on each other. This based on the OHL rivalry they have, and just a general feeling from living in or between them most of life until moving to Hamilton.

I actually thin that might work in the CFL one day as well. For either league in either city, if somebody went in with enough confidence to build/modify an excellent small stadium, that amount of visibility and commitment would generate enough interest and buy-in to succeed. 

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2 hours ago, Ansem said:

Having weak ownership isn't better either. See it like this.

There's supposedly 5 bids in Quebec. A higher expansion fee might encourage ownerships to partner up, strengthening the team's ownership overall.

We are going to shoot ourselves in the foot again because of greed. 

The Mediapro deal is not for the 7 clubs to grab on tight to like a miser to gold. It is premised on a promise: expansion. Not expanding means not fulfilling the CPL part of the bargain. 

If we can't get to 12 or 14 because the Mediapro deal got to the head of seven nascent clubs, then Mediapro will just pull out because we did not keep our word: we will have to go **** off  and make asses of ourselves, like we have always done in Canada.

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29 minutes ago, Unnamed Trialist said:

We are going to shoot ourselves in the foot again because of greed. 

The Mediapro deal is not for the 7 clubs to grab on tight to like a miser to gold. It is premised on a promise: expansion. Not expanding means not fulfilling the CPL part of the bargain. 

If we can't get to 12 or 14 because the Mediapro deal got to the head of seven nascent clubs, then Mediapro will just pull out because we did not keep our word: we will have to go **** off  and make asses of ourselves, like we have always done in Canada.

I had similar concerns about the media pro deal causing them to halt their ambitious expansion plans but the league big wigs seem like they know what they are doing so I wouldn't too alarmed by this. I still think they can get to 16 teams before any second division talks come in. 

As for people who are saying the smaller markets might not have the ability to get the economics right, well that's the whole point of eventually getting promotion relegation, an open market system.

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7 minutes ago, Big_M said:

How many people in Canada are willing to put 8M to have a team in a city of 500k or less?

Who knows.

What I do know is that the seven founding clubs want (allegedly) the expansion fee to be higher to offset whatever revenues they’d lose for making the slice of the current sponsorship pie even smaller.

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45 minutes ago, Big_M said:

How many people in Canada are willing to put 8M to have a team in a city of 500k or less?

The world's 10th economy? More than most nations but the league have to demonstrate that it's worth investing in to begin with

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Let’s remember that this $8,000,000 figure is just heresay right now. The people involved in the CPL are smart business people and I imagine they know how to valuate assets and entities accurately. With that in mind, is the league already saying to people a new club is worth 14 percent more than a new CFL franchise even though the fledgling league only has three games under its belt?

Edited by Macksam

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3 hours ago, Macksam said:

Let’s remember that this $8,000,000 figure is just heresay right now. The people involved in the CPL are smart business people and I imagine they know how to valuate assets and entities accurately. With that in mind, is the league already saying to people a new club is worth 14 percent more than a new CFL franchise even though the fledgling league only has three games under its belt?

At the end of the day, this is what I rely on, despite the speculation that goes on here.  These people amassed millions of dollars because they are better at business that I am.  The idea that I might know how to run a league better is interesting to chatter about, but when push comes to shove, these guys have made a substantial investment in the league.  I am sure they want the best possible outcome for CPL because it would maximize their own investment.  And this is a long game.  If we eventually get to a tiered structure with teams across the country and the level of fan support required to sustain that, these guys will be kings of the league since the major markets will always have a strong chance of ascending to the top of the pyramid.  In that context, I just can't see them throwing up barriers to reasonable, sustainable expansion because that makes poor business sense. 

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