Sunday, March 26 2023

Over the last few seasons, Toronto Blue Jays fans came to know the feelings of misery and misfortune all too well, thanks to inconsistent play and disappointing moments, including missing last year’s postseason despite a 91-win season. On top of that, the pandemic disrupted the Blue Jays more than any other MLB club; Canada wouldn’t allow games to be held during the 2020 season and the first half of the 2021 season, forcing the team to play regular-season home games in various U.S. venues.

The lone MLB team in Canada was plunked financially, logistically and emotionally.

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More than two years later, the Blue Jays are set to host their first playoff series since 2016. And the berth provides a sense of recovery for parent company and multimedia giant Rogers Communications.

Blue Jays CEO and president Mark Shapiro said that the team’s corporate overlord laid out a five-year plan pre-pandemic that included investing via free agency to complement their young core group of players.

“Winning is the single biggest lever to business performance,” Shapiro said in a phone interview. “Everything went according to plan except for Covid-19. … What’s most remarkable to me is that [Rogers] never deviated from the plan and continued to grow the investment in the team. … We’ve been empowered to continue on the plan despite not having much revenue and really suffering a disproportionate challenge to anyone else. From an ownership perspective, I’m excited to see it pay off for them.”

In 2020, the Canadian government denied the Blue Jays’ request to be exempt from the 14-day isolation period required by anyone traveling into Canada at the time; instead, the team spent the regular season playing at their Triple-A affiliate’s venue in Buffalo, N.Y. Then in 2021, the Jays opened the season at their spring training site in Dunedin, Fla. and later relocated back to Buffalo before finally returning home to Canada last July– after 670 days. But even then, fans were subject to seating capacity limits. The crowd restrictions and a limited schedule of only 36 home games at the Rogers Centre over the previous two seasons resulted in “hundreds of millions” in lost revenue for the Blue Jays and Rogers, Shapiro said.

“It was awful,” Bruce Kidd, former board member for the Stadium Corporation of Ontario, which originally developed Rogers Centre, said in a phone interview. “It’s like being an orphan pretty much all season. That’s got to hurt.”

Pro sports disruption in Canada impacted Rogers widely: the company owns 37% of the Maple Leaf Sports and Entertainment (MLSE), which owns the Toronto Raptors, Toronto Maple Leafs and other franchises. The Blue Jays, however, are core to the company’s media business as it continues to invest in the Rogers Centre by adding a new videoboard, AstroTurf and LED lights among other recent upgrades. (The stadium, formerly known as SkyDome when it opened in 1989, can hold 50,000 for baseball games.)

While the impact of the pandemic was severe, the Blue Jays were aggressive in free agency the last two offseasons. They currently have the 10th highest payroll in MLB, according to Spotrac, just behind the Atlanta Braves (8th) which are the only other club in the league owned by a public company.

“Despite the corporate ownership, [Rogers] hasn’t been shy about spending on players’ salaries,” Ernest Wong, head of research at Toronto’s Baskin Wealth Management, said in a phone interview. “They want the [profits] but they also want successful sports teams. Historically, that’s never really been a problem, and I don’t expect it to be moving forward.”

In fact, the return to profitability makes the $186 million payroll more digestible moving forward behind interim manager John Schneider, who seems destined to shed his provisional status. While teams don’t reap a noteworthy revenue boost until they reach the league championship series, the Blue Jays want to take advantage of this moment to grow season ticket sales after being unable to sell ticket packages last offseason.

“This is an opportunity for everything to come together,” Shapiro said. “We need to build on the business success following the on-field success. It’s less about revenues from the postseason and more about how we build on the success of this season for next year.”

The return of home games at Rogers Centre, along with a steady increase of advertising dollars on its Sportsnet channels, contributed to the 21% revenue jump for Rogers in the second quarter. Rogers’ media business overall also returned to profitability with adjusted EBITDA of $2 million compared to negative $75 million in the second quarter of last year. The Blue Jays will finish eighth leaguewide in attendance this season.

There’s no telling how long the Blue Jays’ postseason will last as they prepare to host the Seattle Mariners in the Wild Card Series starting Friday night. But this recovery season nonetheless will be further accelerated the longer the playoff run goes, with extra revenue from ticket sales, merchandise and concessions. It comes at an opportune time as Canada lifted Covid-19 travel restrictions last week.

The Blue Jays’ financial turnaround also provides flexibility for Rogers as it looks to to secure a contested win off the field. Rogers is currently being blocked by Canada’s antitrust agency from merging with telecommunications company Shaw in a transaction valued at $26 billion. The proposed deal is currently on pause as competition regulators go through a review process, but the telecom giants intend on completing the transaction even if the December deadline must be extended another year.

Rogers is potentially taking on more than $15 billion in debt and that heavy load could mean spinning off or liquidating its most popular asset, which it bought 80% controlling interest for $137 million in 2000. The club is now worth $1.8 billion in total value, according to Sportico’s latest MLB valuations.

A Rogers spokesperson told Sportico that there is currently no intention to sell off a portion of the club. But new pressure to find additional dollars for this proposed merger may change things. The Blue Jays’ improved financial health, nestled in a major media market, with control over the stadium and broadcast rights would certainly make the club, even at a limited stake, attractive on the market if corporate decides to take that route.

Rogers, in the meantime, is managing a variety of other issues impeding on its business beyond a potentially stalled merger, including rising costs of inflation and recovery from a major service outage in July. So the Blue Jays’ breakthrough season is a timely and welcomed distraction.

While the Jays typically account for less than 4% of Rogers’ overall service revenue—reporting $12.5 billion last year—the club these days represents as a beacon of recovery, especially as the company resurfaces from the pandemic fallout and weighs looming billion-dollar decisions ahead.

Click here to read the full article.

Source: Yahoo Sports


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