The case for spending $500M on a single Toronto Blue Jay

Fourteen years, $500 million US, a player and a telecom giant, it all adds up to a boost in revenue for Rogers Communications as its Toronto Blue Jays play in the World Series.

After signing his blockbuster, 14-year deal in April, first baseman Vladimir Guerrero Jr. is considered by many sports analysts to be a key element of a team that makes it to the World Series.

And some economists who focus on sports say that, even at half a billion dollars, the huge cost of keeping the superstar Montreal native on the team is profitable from a business perspective.

Professor Victor Matheson said, “If you get to the World Series and a big signing like Vlad gets there, it’s probably (worth it).”Bachelor of Economics at the College of the Holy Cross in Worcester, Mass.

Matheson says, with ticket sales for World Series games alone, Rodgers would have made back what Guerrero has paid so far.

This is based on their prediction of additional ticket revenue – based on what other teams have earned in the past – even after deducting the money the team would have to break even.It’s with the players and the league.

“In terms of this year only, it is only from the ticket sales that you get the full paymentIt’s not this player’s salary, so that’s great. And of course it’s part of the money, isn’t it?”

Actually, there are many other parts to the money for Rogers.

Rogers owns the team as well as the stadium – formerly known as the SkyDome and now the Rogers Center. So it makes money not just from the Jays but from the food, drinks and merchandise sold at the stadium.

It owns the television network that broadcasts most Jays games in Canada – Sportsnet – and a major cable system that many Canadians use to purchase that channel, Rogers Cable.

Specifically, the company said that media and sports revenues increased by 26 percent. most recent quarterly earningsThat’s compared to wireless service revenue, which has been described as “flat” and cable revenue, which has grown only one percent.

The company has stated that it intends to build the Blue Jays into one of the “best sports businesses” globally with its control of Maple Leaf Sports & Entertainment (MLSE).

“This is our third pillar of growth beyond wireless and cable,” said Rogers CEO Tony Staffieri.

Rogers is also predicting that even more money will come in due to his team making the baseball postseason.

“The Blue Jays’ extremely successful MLB playoff and World Series run will provide further growth in the fourth quarter,” Rogers Chief Financial Officer Glenn Brandt said in an earnings call with investors last week.

There’s still risk for Rogers

Matheson says that spending half a billion for the next 14 years on a star player does not guarantee financial success, even if good results in 2025.

He points out that even if the Jays perform poorly, Rodgers will still have to pay for a very expensive first baseman for more than a decade.

“It’s a huge risk in a small market like Toronto, where having a down season like last season can be a very expensive thing when you have a $35 million a year player on your roster,” he said.

But major-market teams often need to employ big-name stars to convey to audiences that their team and their city are worth the price of a ticket or merchandise, Matheson says.

According to economist Duane Rockerby, this may be part of how a company like Rogers and its shareholders view Guerrero as an investment.

“They’re maximizing shareholder returns … they need a dominant player,” said Rockerby, who researches sports economics at the University of Lethbridge in Alberta.

Rockerby says that having a famous superstar will increase people’s interest in the Blue Jays, and may lead them to purchase other products and services from the Jays or Rogers.

He compares it to a luxury offering in a car showroom. Audiences are attracted to big-ticket items – and then maybe, they spend their money on something else instead.

“They have a Corvette sitting there… They don’t make a lot of them and they’re really expensive, but it’s their major thing. It brings people there. And then maybe they buy some cheaper Chevy trucks or something,” he said.

According to Rockerby, even if Rogers lost money on the half-billion-dollar Guerrero contract, he could still make money on all his other operations because of his star power and draw.

‘Spend that money’

From the fans’ perspective, sports analyst Steve Glynn says he has no objection to Rodgers spending millions on a superstar.

“It’s my team, so I don’t care if they bought their way into it … spend that money,” said Glynn, who previously worked for Sportsnet and now runs his own business. Your Podcast Network,

He says it’s Jays fans and Rodgers customers who are ultimately paying for the blockbuster deal to retain Guerrero.

“It’s my money anyway, right? Like we’re all paying for tickets and beer and hot dogs until your arm’s length,” he said.

Glynn also says that, in his opinion, Rogers had previously “set the money on fire with a blowtorch” and still managed to succeed.

One thing he says fans shouldn’t doPect? For Rogers – through MLSE, which also owns Toronto’s NHL team – to also purchase a trip to the Stanley Cup through a superstar contract.

“Hockey has a tight salary capDon’t allow teams to spend more than a certain limit on players…you can’t buy championships in hockey,” Glynn said.

“That, and the leaves be damned.”