TFC piles up ‘equity’
Soccer club’s drawing power, off-field success paying off
If you doubted whether Toronto FC could still pack stadiums, the crowd of 45,000 expected for Wednesday night’s match against David Beckham’s L.A. Galaxy should settle questions about the club’s drawing power.
But will a sold-out Rogers Centre provide a springboard to continued off-field success for TFC?
For five years the club has stockpiled what marketing experts call “brand equity,” expanding its network of loyal fans even though the team has never qualified for the playoffs.
But York University sports marketing instructor Vijay Setlur says soccer isn’t like football or basketball, where frequent pauses in play allow for in-game spectacles that keep fans entertained even if the home team loses.
“The fact that you’re starting to see ads in the paper promoting season ticket sales tells you there’s been a little bit of a slip in demand,” says Setlur, who teaches a course at the Schulich School of Business.
Even before the team began playing its owner, Maple Leaf Sports and Entertainment, partnered with all three levels of government to build the team’s home stadium. MLSE pledged $18 million to the stadium’s $62.8 million cost, while the city contributed $9.8 million in cash and donated land worth $10 million. MLSE quickly recouped its initial investment by selling the stadium’s naming rights to Bank of Montreal for a reported $27 million, but the cash-strapped city’s return on investment has materialized more slowly.
Monday MLSE and the city issued a joint press release stating that BMO Field had turned a $1.1 million profit, which the city and MLSE would split.
In the five years since the stadium opened the city’s share of the profits has totaled $1.75 million, enough to make author Dave Zirin wonder whether Toronto had wasted cash on a team that didn’t need its help.
“The people of Toronto would be better off if that money was dropped from a plane and people could just pick it up and spend it (locally),” says Zirin, author of Bad Sports: How Owners are Ruining the Games we Love. “Every bit of factual data shows that the return on the investment is just not worth it.”
But Setlur says the BMO Stadium funding formula wasn’t the type of contentious deal that turns cities, owners and fans into enemies.
Instead, he says, Toronto’s investment in BMO Field pays off in ways that don’t immediately show up on the city’s balance sheet.
He says the presence of high-visibility pro teams adds an invaluable boost to a civic pride and help a city brand itself, an effect that’s magnified when the team succeeds on the field.