The case for spending $500M on a single Toronto Blue Jay
CBC
Fourteen years, $500 million US, one player and one telecom giant all add up to increased revenue for Rogers Communications as its Toronto Blue Jays play in the World Series.
After signing his blockbuster, 14-year deal back in April, first baseman Vladimir Guerrero Jr. has been considered by many sports analysts as a key element of the team making it to the World Series.
And some economists who focus on sports say, even at half a billion dollars, the seemingly massive cost to keep the superstar Montreal native on the team pays off from a business perspective.
“If you make it all the way to the World Series and it's that one big signing like Vlad that makes it there, it probably is [worth it],” said Victor Matheson professor of economics at the College of the Holy Cross in Worcester, Mass.
Matheson says, with just ticket sales to the World Series games alone, Rogers may have made back what it has paid Guerrero so far.
That's based on his prediction of extra ticket revenue — based on what other teams have made in the past — even after subtracting the money the team must split with the players and the league.
“In terms of just this year, just the ticket sales gets you a full payment of this player's salary, so that's pretty good. And of course that’s just part of the money, right?”
Indeed, there are many other parts of the money for Rogers.
Rogers owns the team itself, along with the stadium — formerly known as SkyDome and now Rogers Centre. So it doesn’t just make money from the Jays but from food, drink and merchandise sold at the stadium.
It owns the television network that broadcasts the bulk of the Jays games in Canada — Sportsnet — and one of the major cable systems many Canadians use to buy that channel, Rogers Cable.
Notably, the company said media and sports revenue was up 26 per cent in its most recent quarterly earnings, compared to wireless service revenue described as “flat” and cable revenue which grew only one per cent.
The company has said it wants to make the Blue Jays, along with its control of Maple Leaf Sports and Entertainment (MLSE), into one of the “best sports businesses” globally.
“This is our third pillar of growth beyond wireless and cable,” said Rogers CEO Tony Staffieri.
Rogers is also predicting there is even more money to come due to its team making the baseball post-season.
