Raptors house owners MLSE in line for a 'giant jump' in income, ex-CEO says


Richard Peddie had a favourite saying during his time as chief executive officer of Maple Leaf Sports Entertainment Ltd., parent company of Toronto’s Raptors and Maple Leafs: “Winning is good business,” he’d say, pausing for effect. “But winning championships is great business.”

Maple Leaf Sports owners BCE Inc. and Rogers Communications Inc. are about to find out just how great.

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Raptors owners MLSE in line for a 'big jump' in revenue, ex-CEO says

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The Raptors won their first National Basketball Association title on Thursday night, beating the two-time defending champion Golden State Warriors and, more important for the business side of the operation, elevating the basketball team’s stature and appeal in a hockey-mad city where it’s often all things Leafs, all the time.

“If they can get the Raptors equal to the Leafs, that would be a big jump in revenue,” Peddie said in an interview Friday. During his tenure, which ended in 2011, a Raptors sponsorship was usually tied to the hockey team, he noted. “Those days are gone.”

Raptors owners MLSE in line for a 'big jump' in revenue, ex-CEO says

Earlier this year, Forbes valued the Raptors at $1.67 billion (U.S.), 11th in the 30-team NBA. The Maple Leafs were valued at $1.45 billion in December, second in the National Hockey League.

The biggest and most immediate revenue bump from the Raptors championship will come from luxury-suite leases, Peddie said. Professional sports teams usually stack, or ladder, their suite contracts, meaning a certain number come up for renewal every year. For the Raptors, whatever inventory is available now — and maybe in the near term — will probably come with a hefty price increase.

As for ticket revenue, Peddie said it’s unlikely to yield a windfall. He said the Raptors had “already blown the doors off” renewals, and “I don’t think there are any more price increases to offer.”

BCE and Rogers will probably seek to explore more revenue opportunities in what they know best: content.

Peddie said Maple Leaf Sports created a number of Leafs-related content initiatives during his tenure, including offering fans the ability to watch game highlights in an hour, then 30 minutes, and then five minutes.

BCE, formerly Bell Canada Enterprises, owns the TSN sports network, and Rogers owns competitor Sportsnet. The partners can also take advantage of the migration of viewers to digital platforms and social media.

“That’s why those companies bought Maple Leaf Sports — they bought it for content,” he said.

Looking ahead, the Raptors face some uncertainty on the court. Among their free agents is Kawhi Leonard, who was the most valuable player of the championship series and who has become a fan darling.

If he stays, the Raptors will probably be among the favourites to win the championship next season.

Unlike hockey, which has a number of teams in Canada, the Raptors are the country’s only NBA team.

The championship run created new fans, nationwide, who are unlikely to abandon the club any time soon.

“That brand can sell nationally,” Peddie said. “That’s good for enterprise value. That’s where Bell and Rogers benefit — and their shareholders.”