Blue Jays cover all the bases for Rogers
One company owns team, stadium and broadcast rights for TV, radio and mobile
As the Blue Jays season stretches into the playoffs, the wins are mounting for team owner Rogers Communications.
The value of the Jays themselves has grown with their winning season, but for Rogers, which has bet heavily on sports, it's a gamble that's paid off on many fronts.
Rogers owns not just the team, but the stadium they play in and the rights to content from the game on everything from mobile phones to radio to specialty channel Sportsnet.
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"This year we got a hell of a return on our hands," Rogers CEO Guy Laurence said at a recent investors conference.
Rogers paid about $160 million for the Jays, buying 80 per cent of the team in 2000 and later acquiring the rest from Interbrew SA of Belgium.
Value of the Blue Jays team
Peter Schwartz, an expert from New York University who values sports teams for Forbes and Bloomberg, says the value of the Jays has been rising for the past three years as baseball enjoys a renaissance in Toronto.
"Three seasons ago I valued the Blue Jays and related entities at $950 million US and there has been substantial growth since for a variety of reasons," he told CBC News.
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"The Toronto Blue Jays today are worth between $1.4 and $1.5 billion [US] and that reflects the team itself but also related business, owned by Rogers Communication, that they leverage the team to see greater value."
Gord Hendren of Charlton Strategic Research Inc., an expert in sports marketing, says in baseball, like most sports, the live experience is valued and that just ups the ante for Rogers.
"Let's think how you can monetize that. First of all there is in the stadium, [you can] sell tickets, sell more sponsorship, more apparel. Then thinking about it from Rogers' point of view, they can sell more advertising on Sportsnet. They can also launch new products in terms of apps that allow people to access more content," he said.
Blue Jays as content
Since Rogers invested in bringing pitcher David Price and other players to Toronto to revive a team that at the time was well out of first place, the Jays have gone from half empty stadiums to sellout crowds.
But it's the value of the media rights that has the greatest potential.
"One of the fastest growing components of media with sports is mobile. Mobile lends itself very well to baseball because people like to keep up with it in terms of data and what we have learned in...our research is big fans like to go deep," Hendren said.
Hendren speculated Rogers may take the opportunity now to raise the cost of its mobile app.
Rogers has spent even more money on hockey than on baseball, paying $5.2 billion two years ago for rights to NHL games for 12 years.
Rogers doesn't break out Blue Jays numbers separately on its financial statements, just as it doesn't break out NHL revenues. But with a winning team comes an advertising bump and a World Series would just add to the bounty.
CIBC analyst Avery Shenfeld said the Jays do add to analysts' valuations of Rogers, but only marginally, as the vast majority of Rogers' revenues and profits still come from non-baseball parts of its business — like its wireless and cable operations.
Big decision on Dave Price
And while Moneris marked a 20 per cent increase in revenue to bars with sports screens and access to Sportsnet in Toronto, that may not represent an economic boost for the region, Shenfeld said.
"Sports events that bring in fans from outside a region, including Olympic Games or even the Super Bowl, draw in spending that would otherwise not flow to the local economy. That's much less the case for baseball playoffs, where the bulk of the spending comes from existing residents," he said.
"The sports bars are full on game nights, but that comes at the expense of empty venues without TVs," Shenfeld said.
Rogers faces a "big decision" next year on its investment in the Jays and especially Price, who is a free agent.
"You know the numbers being talked about are maybe $30 million a year for seven years, so that's a $200-million decision," Hendren said.
"I would say they are probably going to roll the dice for the next two or three years and try to make it work, because the success they have had so far has been off the charts," he added.