Long-term future of Toronto Argonauts a question that's facing CFL

With partnership talks having ceased with the XFL, the CFL has set its sights firmly on a return to play. Training camps are set to open Friday with a 14-game season slated to start Aug. 5.

148-year-old franchise has reported annual losses of $12M within league's status quo

Maple Leafs Sports & Entertainment, owner of the Toronto Argonauts, was the catalyst for a potential partnership with the XFL as a way to establish a new structure that could help improve the football entity's fortunes. (Andre Ringuette/Getty Images)

With partnership talks having ceased with the XFL, the CFL has set its sights firmly on a return to play. Training camps are set to open Friday with a 14-game season slated to start Aug. 5.

But the prospect of CFL football finally returning after the 2020 season was cancelled due to the pandemic is a convenient distraction to another uncertainty facing the league.

The long-term future of the Toronto Argonauts.

The 148-year-old franchise is currently owned by Maple Leafs Sports & Entertainment, the sports/real-estate conglomerate whose primary holdings include the NHL's Toronto Maple Leafs, NBA's Toronto Raptors, MLS's Toronto FC, AHL's Toronto Marlies and NBA G League's Raptors 905.

The company also owns Scotiabank Arena (home of the Raptors and Leafs) and manages BMO Field (home of the Argos and Toronto FC).

The CFL's announcement Wednesday that it had ended talks with the XFL was significant because league sources have continually suggested that MLSE had long been a driving force in a collaboration with the American-based spring league.

With reported annual losses of around $12 million operating within the Canadian league's status quo, MLSE was the catalyst for the XFL discussion and saw a potential partnership as a way to establish a new structure that could help improve the football entity's fortunes, according to multiple sources.

The sources were granted anonymity because neither MLSE nor the CFL has divulged the exact nature of talks with the XFL.

Not every franchise is on the same boat

However, it has become clear not all CFL franchises shared that vision.

Following the league's announcement Wednesday, the Edmonton Elks issued the following statement: "The Edmonton Elks Football Club is pleased by Wednesday's announcement by the CFL that discussions with the XFL have ended. The Elks remain fully committed to the CFL and our treasured brand of Canadian football."

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So while the CFL's decision Wednesday allows it and the nine member teams to concentrate solely upon the '21 season, it hasn't resolved the Argos' issues and only served to raise questions about the future of the franchise and, most notably, it's current owner.

MLSE spokesman Dave Haggith said Thursday the organization's sole focus is "on the CFL's return to play this season. That's what we're excited about for both the league and it's fans."

At first glance, it would appear the company has three options to consider moving forward:

  • Having Toronto join the XFL when the spring league resumes play in 2023 because it's much easier to reach a deal with one team rather than a nine-franchise league.
  • Selling the Argos in time for the 2022 season.
  • Continue owning the franchise and negotiating a better business model/structure for the CFL moving forward given that teams in its biggest markets — Toronto, Montreal and Vancouver — are struggling. Trouble is, the league is unique in that it has three different models in place with community-owned teams (Winnipeg, Saskatchewan, Edmonton), those that are privately owned (Hamilton, B.C. and Montreal) and three owned by conglomerates (Toronto, Calgary and Ottawa).
The second option, though, could be somewhat tricky given the tough sell Argos football has been in Toronto. The franchise averaged a league-low 12,491 spectators in 2019, the last time games were played, and that figure was more than 10,000 spectators under the league's average (22,917).

When MLSE purchased the Argos in 2015, the club made the move from Rogers Centre to BMO Field figuring the change of scenery from the cavernous domed stadium to an open-air facility near Lake Ontario would result in better attendance.

It hasn't.

There's no questioning the depth of MLSE's pockets — its estimated value reportedly exceeds $1 billion — but the company is not in the business of losing money.

And for the second option to happen, there'd have to be a willing purchaser which under the current circumstances may be hard to find.

Any sale of the Argos would likely have to carry the caveat of a favourable lease at BMO Field to help offset the franchise's losses. Although the City of Toronto owns the facility, MLSE manages it.

But the question remains: if MSLE can't sell the Argos in time for the 2022 CFL season, will the Toronto franchise operate north of the border? And if it does not, what impact will that have on the league?

CFL to change business model?

There've been suggestions the CFL change its business model to adopt revenue-sharing to help struggling franchises. However, the bigger question remains just how much money is available to split up, especially during a pandemic and at a time when no club took in any revenue in 2020 because the league didn't play.

The CFL's three community-based teams lost a combined $21.5 million in 2020. The three franchises traditionally posted annual profits prior to the pandemic.

Some league officials are quick to suggest the CFL already operates with a form of revenue sharing in that the nine teams split up equally the money generated from the broadcast agreement with TSN. And shortly after the league cancelled plans for a 2020 season last August came suggestions that revenue sharing would be on the table as it looked to change its business model moving forward.

So for the first time since the '19 Grey Cup, CFL players and coaches will return to the field Saturday with the start of training camps across Canada. But potential storm clouds loom on the horizon.

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