November 25, 2011
Back in March, the Centre of the Hockey Universe exploded with news that the Ontario Teachers' Pension Plan's majority stake in Maple Leafs Sports and Entertainment, Ltd. was up for sale.
Then the fun started. Would Rogers ante a billion-and-a-half dollars (give or take) to reshape the Canadian media landscape with the Leafs?
Could Jim Balsillie buy the Leafs and move them to Hamilton? (That was a joke; everyone knows the NHL's never coming to Hamilton.)
Alas, all the speculation is for naught. The teachers have pulled up their toes from the water. The Toronto Maple Leafs are no longer for sale.
The Ontario Teachers' Pension Plan (Teachers') today announced it is maintaining its ownership stake in Maple Leaf Sports and Entertainment (MLSE). Following various unsolicited expressions of interest in MLSE, Teachers' and its advisors began a process in March of this year to review its ownership stake in the company. Teachers' has concluded this eight-month process with the decision to maintain its stake in MLSE, which has been and continues to be a very successful investment.
With the acquisition in September of TD Capital Group's 13.46% minority stake, Teachers' now owns 79.53% of MLSE. Teachers' will not be commenting further on its decision.
Teachers' decided to put its stake on the block in March of this year to see how much it might fetch, after the pension plan received expressions of interest from potential acquirers. But Teachers' had always said that it would simply hold onto its stake if the ultimate bids didn't live up to its expectations.
So what were the expectations? Please tell us it was $2 billion.
Does it matter who own da Leafs? Since the teachers got involved with Leafs ownership, they've made the playoffs eight times in 16 seasons, and have missed for the last six years. As Nick Cotsonika noted on Yahoo! Sports last week, it's not the ideal setup but it might be the only one for the Leafs:
The best way — at least a fan's favorite way — to run a professional sports franchise is with a singular, committed owner who finds the bottom line in the standings and not on his balance sheet. Think Mike Ilitch. Think Terry Pegula. Winning is personal to them, and they might take risks and accept some losses that an investment manager wouldn't. All owners want to make money in the end, but some want to win along the way more than others.
I don't know if the Leafs will ever have an owner like that. I don't know if they can. They're part of MLSE, which also owns the NBA's Toronto Raptors, MLS' Toronto FC, and the AHL's Toronto Marlies. MLSE owns Air Canada Centre and is invested in four other sports facilities. It owns three TV channels and Maple Leaf Square, a multi-use real-estate development. The Ontario Teachers' Pension Plan is looking to sell its 79-percent stake, and that is worth something like $1.5 billion to $1.8 billion.
Minority owner Larry Tanenbaum might have been that guy, actually, with the right of first refusal on the teachers' stake. That's always going to be a political influence on this sale, whenever it comes down.
But in the end, we all know why the Teachers Pension Plan isn't selling — they want to be along for the ride when Phil Kessel(notes) wins the Hart, the Conn Smythe and the Stanley Cup this season. Or as we like to call it around here — the inevitable.