The World Series championship wasn’t the only thing on the line when the Toronto Blue Jays fell just short in Game 7 against the Los Angeles Dodgers this past weekend: The valuation of the country’s biggest telecommunications company was also in play. With plans to spin off its sports operations into a separate entity, executives at Rogers Communications Inc. were no doubt watching developments closely. Despite the loss, the Blue Jays surprise run, which reinvigorated the team’s fan base in Toronto and across Canada, is likely to pay off for its owners. But just how much was the run worth? And would a World Series win have have changed the picture? The Financial Post’s Garry Marr explains.

What are Rogers’ sports assets and how much are they worth?

The two main components of Rogers’ sports empire are its controlling 75 per cent stake in

Rogers chief executive Tony Staffieri said last month the collection of teams could be worth more than $15 billion, a number in line with independent estimates.

A recent report from the National Bank of Canada valued the MLSE teams at US$10.2 billion, based on the Toronto Raptors at US$5.22 billion, the Toronto Maple Leafs at US$4.25 billion, and Toronto FC, a soccer club also owned by MLSE, at US$730 million. The value of the Blue Jays was pegged at US$2.39 billion. In the past year, the report estimated that the baseball team’s value had increased by five per cent, even before the historic run, which fell two outs short of a championship.

Spinning out those assets into a separate public entity, which the company has said is their plan, could be embraced by both larger money managers eager to gain exposure to the sports pie and retail investors who are also fans of the teams.

Rogers has said it intends to acquire the remaining 25 per cent from billionaire Larry Tanenbaum’s Kilmer Group within the next 18 months or so before pursuing a public offering.

Playoff ticket sales, merchandise sales, television advertising and the increased visibility and strength of the Blue Jays brand no doubt have added to Rogers bottom line and could drive higher valuation when it comes time to take the sports assets public.

How much could the Jays have made on ticket sales and merchandise?

Under Major League Baseball’s collective agreement, postseason teams share playoff gate receipts with the players, with one notable catch: contingent games are not split. That means those best-of-seven series that went the distance will prove to be a big money maker for the Blue Jays.

According to the deal, the players’ pool receives 50 per cent of the gate receipts from the Wild Card Games, 60 per cent from the first three games of the division series, 60 per cent of the gate receipts from the first four games of the League Championship Series, and 60 per cent of the gate receipts from the first four games of the World Series.

The World Series champion receives the highest percentage of the pool, followed by the World Series runner-up.

It may be hard to pinpoint exactly how much the Blue Jays pocketed from their playoff run, but we know that in 2024, the players’ portion of ticket revenue was US$129.1 million, up from US$107.8 million in 2023.

But that’s only part of the picture. “It’s not just tickets, it’s the concessions and merchandise,” said Bart Given, a former assistant general manager of the Blue Jays from 2005 to 2009.

Anything sold online or in a third-party store is split among the 30 MLB teams. However, if you buy something at the stadium, the team receives the money. Judges by endless sea of jerseys in the crowds, merchandise sales were no doubt brisk throughout the run.

What about future ticket sales?

While the club would have booked gains from the handful of playoff games, the real profits from this run may not be felt until 2026.

Given noted few teams sell out all 81 home games, so a winning team almost always makes a difference to ticket revenue.

“You really want that money up front to keep you away from the risk of a poor season,” said Given. “There are no guarantees. You need to secure your revenue. Let’s say someone gets injured.”

Andrew Zimbalist, a sports economist at Smith College, said the larger story is how much money the team can charge for everything in the future. “Spending also goes up because fans are staying in the stands for all nine innings if they are winning,” he said.

Sal Galatioto, President of Galatioto Sports Partners, a sports investment banking firm, said he doesn’t know the exact numbers, but a typical playoff run like this generates US$30 to $35 million in revenue. Though he said the run can’t hurt future IPO efforts, the bottom line total would be small relative the overall valuation of the team.

“It’s just not a life-changing event, one way or another, whether they went to the World Series or lost the World Series,” he said.

Richard Peddie, former CEO of Maple Leaf Sports and Entertainment who also ran SkyDome, as The Rogers Centre was known at the time, said that a $400 million renovation for the stadium, which the telecom company had purchased for $25 million back in 1999, has likely paid off in part due to this success.

“They made the stadium better; it was built for multi-purpose and felt almost obsolete by the time it was opened,” said the executive, noting the renovation shrank capacity by about 6,000 seats but added more luxury seating. “Hats off to Rogers for spending the money. And now they’re getting a return on investment.”

Executive suites, valued in the thousands of dollars, were gobbled up during the season, and Rogers leveraged the sale of playoff tickets by tying them to the renewal of season tickets.

What does the run mean for television revenue?

At one point, 18.5 million people living in Canada were watching Game 7 of the World Series, surpassing all previous viewership records for the Jays in the country.

The numbers were undoubtedly helped by Rogers-owned Sportsnet having its own broadcast available nationwide and streamed online.

“Each round of the playoffs, the Rogers sales team was hitting you again. People were probably trying to buy ads (on gameday),” said Given.

That 18-inning game likely created a dilemma because buyers typically purchase a specific number of spots in the game, often at a dedicated point or inning.

“The extra innings become fill, so do they give some of their great partners an extra spot, or might they have just bonused Rogers with more ads?” said Given. “You know, Rogers won’t complain if they get more ads. It’s also not like in the summertime, people hang in to the final pitch.”

Zimbalist noted that a television contract is an internal transaction, but depending on the timing of the contract, it will create more money for the team.

“This could really depend on how Rogers is trying to minimize taxes, but it also comes out during collective bargaining,” said Zimbalist. “With collective bargaining, one of the things they try to do is hide revenue (from the players). They can seek a lower value for television rights.”

It’s hard to know what the Blue Jays’ television deal is, but ESPN is paying US$550 million a year for a slice of MLB games, and in 2013, the Dodgers and Time Warner Cable signed a 25-year broadcast agreement worth US$8.35 billion.

Galatioto cautioned that if the Blue Jays revert to finishing last in the division, the television deal won’t mean much. “Very short memories in sports,” he said.

What is the bottom line? And how much did losing cost them?

There will be debate about exactly how much the run is worth, but Given said that the valuation of the franchise no doubt increased due to the playoffs, driven by revenue growth from ticket sales, sponsorships, and all the benefits that come with winning and packed stadiums.

“Look how much the Golden State Warriors rose in value after some of their playoff runs,” he said, adding it’s possible Toronto’s baseball team’s value climbs by 30 per cent.

Peddie noted that while franchise values are usually stable, winning does affect enterprise value, and that Rogers will use the Blue Jays’ success if it takes MLSE public.

But Zimbalist said Rogers Communications could face some friction in spinning out its holdings, which might need permission from the league.

“Major League Baseball tends to shy away from that,” said Zimbalist. “If Rogers gets permission, it will increase the brand value of the team. Even going at least seven games increases the value but it’s mostly brand value, rather than revenue or profit.”

Galatioto, who said the true value of the franchise is that Toronto is one of the largest markets in North America, with a high per capita income and numerous corporate headquarters, agrees it may be tough to take MLSE public.

“(Rogers) would really need to maintain a control position,” he said, adding Madison Square Garden Sports Corp. is the only true publicly traded sports company. “This won’t hurt the IPO. It’s an incredible group of assets, one of the best in all of sports,” said Galatioto.

Peddie said a championship ring would have featured prominently in any pitch to go public.

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‘If Edward Rogers is sitting in front of a whole bunch of potential investors, I can imagine how he would be doing it. He would be wearing a championship ring with a bunch of diamonds and handing out T-shirts to all of the bankers,” Peddie said, referring to the telecom’s executive chair.

“I have participated in presentations like that. When you are winning, it is much easier to sell investors.”