Selling Blue Jays would produce changes in on-field product
The club might gut their roster like the Miami Marlins, or spend lavishly like the Los Angeles Dodgers.
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Selling the Blue Jays would secure a healthy profit for Rogers Communications — the $165 million investment made in 2000 is now valued at $1.3 billion by Forbes magazine.
Rogers CFO Tony Staffieri told the UBS Global Media and Communications conference in New York Tuesday night that the telecom titan is evaluating selling Canada’s only major league baseball franchise. But before making that move, Rogers would have to consider the long-term implications of uncoupling Sportsnet TV and radio networks from their most reliable source of content, ratings and revenue.
Rogers issued a statement Wednesday suggesting that the team’s value isn’t accurately reflected in the company’s share price.
“We have terrific sports assets including the Toronto Blue Jays that have performed really well for us,” said the statement, attributed to Rogers Communications and posted on Twitter by Sportsnet reporter Shi Davidi. “We would like to surface value and get credit for these assets in our overall company valuation.”
A new owner, and a changed relationship between team and broadcaster, could profoundly affect the on-field product.
Two months after a group that included Yankees legend Derek Jeter bought Miami Marlins, the team’s new bosses are engaged in a cost-cutting campaign that includes trading the team’s most marketable player, all-star outfielder Giancarlo Stanton.
Where the Marlins risk alienating their remaining fans by dumping their best-known player, a prospective Jays owner stands to inherit a large, loyal customer base.
The Jays finished 76-86 and missed the playoffs for the first time since 2014, but the club still posted the fourth-best attendance in the major leagues, averaging 39,554 spectators per game.
“Wins and losses affect the upside price (but) they don’t affect the downside price,” said Brian Cooper, CEO of MKTG, a Toronto-based sports sponsorship consultancy. “It’s more about market size, broadcast rights and a historical fan base . . . . It’s not a bad time to sell. Look at attendance.”
After a sale the club’s near-term, on-field future would depend on the type of owner that takes control of the team. A cost-conscious corporate owner might spend frugally on salaries, but a wealthy individual more concerned with winning than immediate profit might remake the Jays in the image of the Los Angeles Dodgers.
In May 2012 the Dodgers sold for $2.1 billion to the Guggenheim Group, and the new owners have spent the five ensuing seasons spending lavishly on player contracts. Under its new owners the Dodgers, runners-up in the 2017 World Series, have boasted the highest payroll in the majors every year since 2014.
“You could all of a sudden see the payroll go up $30 million,” said Norm O’Reilly, a business professor and chair of Ohio University’s sports administration department. “That could be great for the team if all of a sudden they’re in the market for a big free agent.”
The Jays’ last big roster makeover highlighted how interdependent personnel, on-field success and broadcast dollars have become.
After the 2012 season the club traded a slew of prospects for a series of veterans that included pitcher R.A. Dickey and shortstop Jose Reyes. Months later Sportsnet executives invited media to Rogers headquarters to explain that the Jays made those moves to strengthen the Rogers-owned broadcast network. A contending Jays team was meant to boost TV and radio ratings, along with corresponding ad revenue, from August through the fall.
That set of trades didn’t power the Jays to the playoffs, but the post-season appearances and increased viewership came eventually. And though it’s not clear exactly how the on-field success affected Rogers overall, Jose Bautista noted the corporation’s rising share price when he lobbied for a lucrative contact before the 2016 season.
“There’s a direct correlation with the success of their earnings per share after we started experiencing success,” Bautista said at the time. “Are they going to put it out in the media and say, ‘Because of the Jays we made all this money’? No, but you can read between the lines.”
While the Jays spent the 2012 off-season reloading to contend quickly, the Houston Astros were suffering in the service of long-term success, gutting the club’s big-league roster, investing in analytics and scouting, and posting three straight 100-loss seasons. Houston’s sports fans grew so indifferent that the Astros twice posted games with 0.0 ratings.
This year’s World Series title appears to justify the club’s early 2010s futility, but the anemic ratings helped Comcast SportsNet, jointly owned by the Astros and Houston Rockets, to declare bankruptcy before being bought by AT&T in 2014.