Friday, October 12, 2007

NFL expansion to Canada will not include the Peanuts cartoon gang

One of the lasting imagines in the old Peanuts comic strip was Lucy’s lemonade stand. But instead of selling lemonade, she offered psychotherapy. Imagine Lucy getting together with Charlie Brown, Snoopy, Linus, Peppermint Patty, and Woodstock , each of them setting up their own lemonade stand collecting all of their dimes and nickels and then trying to buy a National Football League franchise for $1 billion. Thursday, a report in Canada’s national newspaper The Globe and Mail suggested professional sports version of Charlie Brown and company, the Canadian Football League are planning to work together to bring a National Football League franchise to the Frozen North.

The bid will reportedly be orchestrated by the owners of the Toronto Argonauts David Cynamon and Howard Sokolowski, and seems to have the initial backing of CFL commissioner Mark Cohon. Cynamon and Sokolowski’s rationale – if you can’t beat them, join them. Cynamon and Sokolowski believe the NFL’s arrival in Canada is inevitable and believe by being a part of the process and owning the team they’ll be better able to control their own destiny and that of the Canadian Football League.

"It's the single biggest issue the CFL is facing," a league source familiar with the situation said in the Globe and Mail report.

Cohon declined to comment directly on the issue of the NFL’s arrival in Canada and the role the CFL might play according to the Globe and Mail, but did issue a statement saying: "The CFL and NFL have enjoyed a very strong working relationship for over a decade, and we have expressed mutual interest in continuing that relationship into the future. However, at no point have the CFL and NFL discussed the notion of CFL ownership of a Canadian NFL franchise."

NFL spokesman Brian McCarthy added: "We do not have any expansion plans and no teams have filed the necessary paperwork for relocation."

However Thursday evening the Canadian Press did their best to reign in the earlier Globe and Mail report – all but dismissing the Globe and Mail article.

"It was thrown around as a crazy concept, just a loose, crazy concept," said one.

"The Argos owners are very paranoid about it, and probably with good reason. But it's all very, very premature . . . I think everyone is getting way ahead of themselves."

Added the other governor: "Let me tell you, this is very, very, very premature."

Both Cynamon and Sokolowski didn’t make themselves available for their reaction to the Canadian Press report.

While Cynamon and Sokolowski’s thought process makes perfect business sense, it remains to be seen if the pair have the financial wherewithal to make the plan they’re being linked to a reality. At the same time NFL ownership regulations wouldn’t allow a group to own an NFL franchise. Current NFL bylaws dictate that an NFL franchise's principal owner must have at least 30-per-cent equity interest in the corporate entity that controls a club, and no more than 25 "owners" can hold equity interest in the team. There are a limited number of individuals among the current CFL governors who might be able to come up with that 30-per-cent stake. The sole exception are the Green Bay Packers, community owned as an original NFL franchise and as a result grandfathered in and not subject to the current NFL ownership guidelines.

Much of the discussion in Canadian media circles Thursday focused not on who would own an NFL team if one arrived in Canada but where that franchise would come from. Many believe the Buffalo Bills ( Buffalo is 100 miles from Toronto ) are a prime candidate for a franchise shift. The Bills play in an aging facility and Bills owner Ralph Wilson at 89 years old isn’t getting any younger. Wilson has repeatedly gone on record saying he won't leave the franchise to his heirs (because of estate taxes) or sell it before he dies. That would create an estate sell (how the Boston Red Sox were sold) that would determine the Bills future.

In their latest subjective financial valuation for NFL franchises, Forbes Magazine (always well respected in their objectivity and accuracy) believes the average NFL franchise is worth an estimated $957 million. When the NFL next expands it’s generally believed NFL owners will demand a $1 billion expansion fee. It’s reasonable to believe the Bills might command a price of $1 billion on the open market, especially if the Bills will be able to move to another city. It’s also important to factor in where the proposed Toronto NFL franchise would play their home games. The Rogers Centre (home of the Toronto Blue Jays) is owned by Ted Rogers (the owner of the Blue Jays). While the 52,000 seat facility is at least 10,000 seats short of what’s needed for an NFL team in today’s NFL a “plan” does exist whereby the money losing hotel that is attached to the facility could be torn down and replaced with at least 10,000 seats. It remains to be seen how workable a solution that might be, but regardless Cynamon and Sokolowski are Rogers Centre tenants.

The president of the Blue Jays (the Rogers Centre primary tenant) Paul Godfrey has been a longtime proponent of bringing an NFL team to Toronto . Godfrey has championed the idea of an NFL team in Toronto for at least the last 30 years. The former Toronto Mayor was somewhat surprised by Thursday’s Globe and Mail report suggesting Cynamon and Sokolowski may be interested in bringing an NFL team to Toronto according to a Canadian Press report.

"They don't quote anybody at all so my first impression is I don't know if it's a trial balloon or speculative story," Godfrey said. "But if you use the assumption that the CFL has embraced the idea of an NFL team in Toronto , I would sure love to sit down and speak to them on behalf of the Rogers-Tanenbaum group because I think our interests are totally in parallel.

"We all believe, and I'm speaking on everybody's behalf, that the Toronto NFL team and the Toronto CFL team could co-exist. I would go further and say a Toronto NFL team would do everything in its power to ensure that the CFL is stronger and healthier in every aspect than they have been.

"I would like to speak to them to show them that there are ways and means we can work closely together with the CFL to make it all happen."

Godfrey has attended the Super Bowl and most NFL events for at least the last two decades with one goal in mind – bringing an NFL team to Toronto . While Godfrey doesn’t have the personal wealth to bring an NFL team to Canada , the man he works for- Ted Rogers, does.

Early in September 2006 Canada ’s two most important sports entities began the process that might one day create one of the largest sports ownership groups in North America – a power that will demand and earn respect. Ted Rogers owns the Toronto Blue Jays and the Rogers Centre. Rogers also owns Canada ’s largest cable provider, Canada ’s number two cable sports network, and three all-sports radio stations, along with many more media properties. Maple Leaf Sports and Entertainment owns the Toronto Maple Leafs, the Toronto Raptors, Toronto ’s MLS franchise, the Air Canada Centre and the new soccer specific stadium BMO Field.

A year ago Rogers replaced Bell as the supplier of telecommunications services to MLSE. Officials from both companies at the time mentioned the corporations would embark on other "joint ventures." On the surface the agreement doesn’t mean a great deal. However, as the two key players for both companies indicated, their initial ‘supplier agreement’ doesn’t begin to scratch the surface as to what these two companies believe they can accomplish together.

"I'm highly interested in an NFL team and Ted [ Rogers ] is too," Larry Tanenbaum, chairman of Maple Leafs Sports and Entertainment, said at the time. "We hope to pursue it more rigorously as soon as the NFL gives us the word."

Rogers was quick to publicly pooh-pooh suggestions he’d be interested in bringing an NFL team to Toronto , but that’s how Rogers operates. He has become Canada ’s media baron in part because of how subtle he tends to operate. But be very clear about this when it comes to Ted Rogers – he fully understands and appreciates the synergy that can be created between a sport franchise and other media properties.

If you talk to Ted Rogers you’d believe he is soft spoken. He’s not a bombastic business person/sports owner in the tradition of a Jerry Jones. Rogers has several key abilities the NFL looks for in potential owners. First and foremost, he delegates authority. A hallmark of a Rogers ’ company is Rogers hiring the right people and delegating those people the responsibility to run that company for him. He’s a man with vision and a risk taker – as long as the risk has a reasonable chance of succeeding. And let’s be very sure of one issue – when Paul Godfrey went to work for Ted Rogers, he brought his dream of an NFL franchise with him to Rogers .

As the head of Toronto ’s City Council and then as Toronto ’s Mayor, Godfrey was a key person when the American League awarded an expansion franchise to Toronto in 1976. He also played an important role in getting the SkyDome (now the Rogers Centre) built in 1989. Godfrey has the innate ability to bring people with money together and move forward on major and very costly projects. Given that Godfrey has wanted to secure an NFL franchise for Toronto for at least the last 25 years, now that he has the right people interested, Paul Godfrey finally is nearing the red zone. He knows how to get the ball into the end zone, with the end result being the awarding of an NFL expansion franchise to Toronto .

Ted Rogers represents the perfect ‘front man’ or lead owner the NFL loves. He offers the league the largest media platform any individual can provide the league in Canada . In Larry Tanenbaum, the NFL has a partner already fully vetted by the National Basketball Association. The NFL doesn’t like their owners to own other major sports franchises. The Toronto Blue Jays, Maple Leafs, Raptors and the expansion MLS franchises all closely linked to Rogers and Tanenbaum are owned by corporations and ownership groups, not by Rogers or Tanenbaum personally.

Rogers understands content is king. An NFL franchise would represent untold content for his all-sports radio stations, cable sports network and other media platforms. When Rogers (the company) purchased the Blue Jays, Ted Rogers (the CEO) made it clear he believed a tremendous synergy could be created between the Blue Jays and every facet of the Rogers media empire.

Tanenbaum has consistently shown a strong interest in playing with the ‘big boys’. When Larry Tanenbaum wants something, he has the drive and determination to find a way to get it done.

Paul Godfrey has proven on numerous occasions he has the ability to bring people and money together to create what he believes are world-class opportunities for Toronto. His biggest dream has always been an NFL franchise – he’s consumed by that goal, and with a proven track record, he’ll find a way to get the deal done. Godfrey is a deal maker.

Thursday’s Globe and Mail report was as Godfrey suggests a ‘trial balloon’ from Cynamon and Sokolowski or should their interest be taken seriously? On the surface Cynamon and Sokolowski are going to have to demonstrate they have the financial resources to be taken seriously. Rogers and Tanenbaum don’t have to prove to anyone they can talk the talk. And with Godfrey as their front man, and if they’re serious, they’d be a difficult group to compete with for an NFL franchise. Its almost Charlie Brown and company in one corner and Peanuts creator Charles Schultz in the other. Judge for yourself who’s more likely to succeed.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The Globe and Mail and The Canadian Press

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