CPL new teams speculation

[Ams1984]

1 hour ago, Ozzie_the_parrot said:

If you listen to that latest interview he specifically talks about the fee when asked and says it is significant rather than enormous or something along those lines, so there definitely is a membership entry fee. Unless or until they have a way for teams to enter through promotion up from district provincial level leagues through a pyramid league system, it is reasonable to talk about franchises rather than clubs. It's not even clear at this point that the promotion and relegation system they talk about as a future aspiration will ever be open to clubs to move up from provincial leagues rather than simply being a case of having a closed league system with a first and second division.

Even if it’s an entry fee rather than a minimum commitment to fund your own club, it isn’t particularly surprising to me, and isn’t really instructive as to the franchise vs club discussion; if there are existing media and sponsorship deals (which there are) its only logical that new clubs should pay the cost of whatever dilution the existing clubs suffer as a result of their entry. This doesn’t make the clubs franchises though, neither does the lack of pro/rel. the terms “franchise” and “club” have specific definitions, “franchise” especially is a legal term of art describing a type of juridic entity and it’s relationship with a licensor. There could be pro/rel with franchises. There could be a league with no pro/rel that isn’t comprised of franchises. 

It’s all about the legal relationship between the constituent entities ‘clubs/franchises’ and the league as a juridic entity. That’s the only factor in deciding whether the clubs are in fact clubs or franchises. I haven’t seen anything from the CPL that indicates a franchisor/franchisee relationship. In fact, the only real information we have on the topic is a statement by the league commissioner indicating that the league isn’t a franchisor and that the clubs aren’t franchises. 

 

[Ozzie_the_parrot]

Would anyone even care about the semantics of this ill-defined club vs franchise distinction if MLS didn't exist? In a soccer context you clearly have a club structure if new entries to the structure have to start at the bottom in a local league and slowly play their way into the top national league over many years by achieving many promotions on the field of play, while it is not easy to see how you do not have a franchise setup if teams started up completely from scratch get to go straight into the top national tier based primarily on their ability to pay their way in.

Edited July 20, 2019 by Ozzie_the_parrot

[toontownman]

9 hours ago, Unnamed Trialist said:

So, we did  not wait at all to start the league, we jumped in, we had no idea if any would be sustainable. There was piss all sustainable a year ago. We all rushed, we were not ready, we had no idea of player pools, we thought there were four refs in total in Canada available.

But now, great, we want anyone new to be sustainable, and it has to be just right, and we have to be sure of things. For them. Because for us it made no difference at all.

Yeah. Not what I said, I didnt mention anything about the existing teams, but thanks for the reaction I will return you knee when I find it. 

Its clear many of the additional rumored teams are far further behind where the existing clubs were to start and for many reasons. 

Halifax was an outlier and comparable to some of the prospective new teams but even then they tested the market and put wheels in motion like they are doing in Saskatchewan. All the other teams had either owners directly invested in the league or existing teams/large active and organized player pools to draw from. That's not a knock on them it's a reality for other places and ownerships potentially without some of that experience or advantage in starting a soccer club.

I'm not downplaying or discrediting those that were there from the start or those that are late to the table. The main thing is that when they get to the table they are at a point they can run sustainably within their community and have operations/markets and a growing player pool that can solidify that. 

It's all frustrating waiting for new teams and "I think" the CPL would have hoped it would be an easier and quicker process than it appears to set them up. Patience and support, not pressure and snobbery is going to help the league grow. Imo.

[ted]

16 minutes ago, toontownman said:

Patience and support, not pressure and snobbery is going to help the league grow.

[CanSuffer]

14 hours ago, Ozzie_the_parrot said:

Would anyone even care about the semantics of this ill-defined club vs franchise distinction if MLS didn't exist?

I don't care about the semantics or MLS. I'm just saying that a fee for new CPL teams is not something that is substantiated by fact. Yet.

[Kent]

10 hours ago, CanSuffer said:

I don't care about the semantics or MLS. I'm just saying that a fee for new CPL teams is not something that is substantiated by fact. Yet.

I don't know how this doesn't count as "fact", but it seems like either everyone here disregarded this or didn't see it. Maybe they had BBTB blocked a year ago when this article came out. This is the article he is referring to, and the relevant part is a quote from someone who says they have spoken with the CPL on this.

https://lfpress.com/sports/soccer/will-london-build-a-downtown-sports-stadium-its-a-possibility

“There was the franchise fee, which is in the millions. Then there was the expectation that there would be money lost in the first few years,” Campbell said.

[Ozzie_the_parrot]

$9 million is the franchise fee that is being quoted quite a bit on Reddit by those who claim inside knowledge, for what it's worth, and this was a response I got on there today when I expressed skepticism about it:

This poster is also skeptical about Saskatoon getting in because he has heard that Joe Belan had a bit of a falling out with the top people involved with CanPL at one point and thinks that he may not be viewed as a welcome addition to the league's collective ownership.

Edited July 21, 2019 by Ozzie_the_parrot

[Cheeta]

Again,  the franchise/whatever fee shouldn't matter as I expect it is likely deferred.  It will be payed out of the sponsorship payments which would otherwise have gone to the new club over the next few years.     

It's sort of a financial stress test for potential entrants isn't it?  Removing league funding from their business model.

If you didn't have the means before the league attained sponsorship money to be part of CPL it's just as likely you don't have the means to be part of CPL now.   Not really someone you want involved in this enterprise. 

I speculate of course, and it all must read rather harsh because it is rather harsh.  Still, there it is.  

Just be clear, I think expansion is a top priority for this league and I think certain markets are a top priority for this league.  Speaking of harsh, I also don't believe there is a cookie cutter model that will be applied for every single expansion bid.  If a good bid comes from out of Quebec City for example but it needs a smaller entry fee deferred over a longer time period I think the league needs to keep an open mind.  The CPL itself needs to continue investing in this league to.   

[Ozzie_the_parrot]

The person being quoted is the owner of FC London, the former PDL champions now in L1O, who says he met with CanPL to discuss the possible entry of a London, Ont team. The article describes his reasons for not pursuing it with the large franchise fee being mentioned as one of the main reasons. As for whether it is the wrong terminology, if it waddles like a duck and quacks like a duck...

[Unnamed Trialist]

So someone casuallly calling it a franchise fee, in one interview, casually, non officially, has more credit than the entire league officially saying they are not franchises and there is no fixed fee. 

In any case, CPL asks for money to enter into the league. You could call it seed money, or an investment that goes into the general CPL fund, along with the investment you will make on your stadium, team, staff.

Since there are a few clubs that have some financial questions that derive from errors in stadium choice, marketing, pricing, which could lead to someone pulling out (probably due to their own mistakes), you better damn well get more teams in before you start getting all haughty about the value of your league. 

[Gopherbashi]

I'm not going to pretend to have any inside knowledge, but I wonder if that "franchise fee" somehow combines an entry fee + a multi-year bond.

Wasn't there also some discussion a while back about the original seven teams having some kind of stake in CSB that expansion teams wouldn't have?  Perhaps this $8-9 million franchise fee refers to a stake in CSB which is separate from league membership.

[Unnamed Trialist]

1 hour ago, Gopherbashi said:

I'm not going to pretend to have any inside knowledge, but I wonder if that "franchise fee" somehow combines an entry fee + a multi-year bond.

Wasn't there also some discussion a while back about the original seven teams having some kind of stake in CSB that expansion teams wouldn't have?  Perhaps this $8-9 million franchise fee refers to a stake in CSB which is separate from league membership.

Any new club is buying into the security of the 200million MediaPro deal, minus the proportion already doled out this first season. 

But any new club may in fact also be helping to ensure the terms of the MediaPro deal, which was not made on the premise of having only 7 teams/markets in the near, mid or far-off future. 

So you cannot calculate what they are getting only, you have to calculate how new clubs in CPL actually help guarantee what the existing clubs are benefitting from.

[Ams1984]

17 hours ago, Lofty said:

Thanks for the link. Just to give that quote a bit more context:

Interest seems to have ratcheted up about a potential stadium with the establishment of the Canadian Premier League, a new national soccer league with seven franchises. The CPL is a hard-pushing organization that’s selling itself as the true Canadian league. Several franchises have been established in cities with Canadian Football League teams.

FC London’s founder and chief operating officer, Ian Campbell, says he had discussions with the league last year but the financial numbers didn’t work out.

“There was the franchise fee, which is in the millions. Then there was the expectation that there would be money lost in the first few years,” Campbell said. “I also think that the travel expenses are going to be really steep. It’s expensive going to places like Victoria.”

Either the author and the person he is quoting are confused or uninformed about the structure of the league, or the commissioner, David Clanachan is, since he has categorically said it is not a franchise based model.

This would certainly not be the first time an uninformed journalist had used the wrong terminology.

It’s probably a case of an overly liberal use of the word “franchise” by the journalist. 

[Ozzie_the_parrot]

The phrase "franchise fee" appears in a direct quote attributed to Ian Campbell.

[SpursFlu]

Doesn't a franchise fee/expansion fee get divided up amongst all the existing teams?

Edited July 22, 2019 by SpursFlu

[Ozzie_the_parrot]

Prior to the launch, the fee would have helped to provide the startup capital that was needed to fund league operations (such as marketing expenses, salaries and expenses for Beirne, Clanachan, et al.) until revenues started flowing in. Later on the fee is about paying for a share of existing league assets and compensating the existing owners for taking an extra share of league revenues for x number of years into the future.

Edited July 22, 2019 by Ozzie_the_parrot

[Ozzie_the_parrot]

Again I seriously question whether anyone would even care about the use of the word "franchise" if there wasn't a desire to create a point of difference from MLS that is perceived by some people as making the league more authentic in some way. Any way you slice it new teams will have to pay to get in and gain an eventual share from revenues derived from league related ventures like CSB (perhaps keeping that at arms length and not having the same sort of single entity concept going on as MLS does is part of how they think that they get to claim to be clubs rather than franchises as if it makes some crucial difference). When asked about the size of the expansion fee at around 14:00 in this interview:

https://www.tsn.ca/radio/montreal-690/clanachan-we-are-speaking-with-a-number-of-parties-in-quebec-1.1339314

He doesn't deny its existence and after saying he won't get into the dollars and cents, describes it as "not a huge investment but a significant investment" whatever that means.

Edited July 22, 2019 by Ozzie_the_parrot

[Ozzie_the_parrot]

Try telling Clydebank and Meadowbank Thistle fans in Scotland or Wimbledon fans in England that you can't have a club as opposed to a franchise yanked away from you. Beyond that I really couldn't care less either way as long as pro soccer in Canada thrives in the years ahead. MLS has led the way in showing pro soccer can work. Hopefully CanPL does likewise in the years ahead. Most normal soccer people in Canada would want both leagues to do well.

https://en.m.wikipedia.org/wiki/Relocation_of_Wimbledon_F.C._to_Milton_Keynes

http://news.bbc.co.uk/sport2/hi/scotland/2118528.stm

Edited July 22, 2019 by Ozzie_the_parrot

[Unnamed Trialist]

6 hours ago, Ozzie_the_parrot said:

The phrase "franchise fee" appears in a direct quote attributed to Ian Campbell.

And he is the one that decides the business model for CPL, is that what you are saying?

So if I want to start an OrangeTheory Fitness in my town, and I say there is a licensing fee of X amount of dollars when I talk excitedly to the local press, then by your logic, OrangeTheory charges a licensing fee, and is therefore not a franchise operation?

Your posts define "tendentious"

[Unnamed Trialist]

2 hours ago, Lofty said:

Wimbledon FC was relocated approximately 50 miles to a place that was easy to reach from Wimbledon. The thinking in allowing it was that Wimbledon fans could still easily continue to support the team. Nevertheless, the fall out was significant and that type of relatively small but certainly non trivial move is unlikely to be allowed again by the English FA.

Not the same thing at all as moving the Jets from Winnipeg to Phoenix (for example).

Regardless, I really do not agree that not having franchises does help avoid such moves of clubs from one place to another. In Spain you can purchase the license of another club and relocate it, though you need permission and it does not happen often.

For me that is not the advantage, in fact I am not fully convinced there is a great advantage--I think single entity in MLS is a worse problem than franchised clubs. If you have a league with high standards that are clearly laid out and enforced, and the national FA is backing you and also pushing for minimums (as well as providing your FIFA qualified reffing and disciplinary committees perhaps), then you have a similar level of control.

A national D1 league should allow any club to participate, and the fees and costs should only be in terms of fulfilling minimum standards and paying for them, not to create a pyramid scheme. That is why promotion and relegation are so brilliant. 

But the advantage for our sport is that you have entities defending the principles of the game as played internationally, even advancing them (we are the first league in the world to apply the International Board's new rulings, so effectively an international test case). That means you cannot go maverick and come up with bogus concepts that defy what soccer is about, like they do in the NBA allowing travelling and double dribbling in the name of showtime. 

[CDNFootballer]

CPL doesn't "claim" they have clubs, they in fact do have clubs and not franchises. The league is based on a club model not a franchise one. CPL clubs own the league.

MLS, with its odd single entity setup doesn't have clubs, as even Don Garber has stated, it has owner operators of a business unit, think of it like a Mcdonalds franchise. The teams don't own the players or the league but buy a right to operate a business unit.

Most of the worlds fans would likely say the CPL is more authentic compared to the MLS.

As for the word Franchise, as others have pointed out, its used loosely and incorrectly much of the time.

[grasshopper1917]

The reality is we dont really have a clue whats going on behind closed doors on the business side. The league lets out a few details that they want us to know. However we have no idea how accurate they are or how they are twisted around.

For instance people keep talking about the '200 million media deal' and assuming that means they are giving 200 million dollars to the league (or some dollars) . In my mind that is very very very doubtful. We likely will never know as there is virtually no real reporting on the league.

However what if medipro figures their production of the games and the cost associated with it is worth 20 million of year? They are picking up the 20 million production costs/fees in exchange for global right to the product. Still a 200 million dollar deal over 10 years - however the league doesn't see a penny. They just don't have to pay anything to have the games produced. I mean to me that is a way more likely scenario - unless someone at MediaPro is smoking a ton of the good stuff.

Then again I doubt there will ever be a real way to verify this or much else that happens in the league unless some journalists really start covering and ask something other  then fluffball questions.

[Aird25]

I'm sick of the secrecy behind every aspect of this league and MLS. What's the point of isolating your audience? 

Edited July 23, 2019 by Aird25

[baulderdash77]

Honestly the internal financial model is something that very few fans care about or really should.

The product is what matters.  Team budgets matter because of the talent the team puts on the field but that’s really it.

[Aird25]

3 hours ago, baulderdash77 said:

Honestly the internal financial model is something that very few fans care about or really should.

The product is what matters.  Team budgets matter because of the talent the team puts on the field but that’s really it.

I love trying to predict lineups, transfer decisions, managers choices, and comparing strategies and decision between clubs. It makes you feel involved. That can't happen when basic details about the club aren't shared with the fans. From what I've seen, the overall football knowledge around the stadium has been pretty good. People know the sport, but nobody has a clue about the team and players they're watching. They haven't even added pictures for half the players on their website. It's a difficult way to win support, and I don't know what the advantage of operating that way is.