Rogers comments on the state of the Jays

[Dick_Pole]

Not sure if anyone was paying attention, but Rogers released their Q2 results on July 24th. After reading through their transcript to put together some competitive intelligence as part of my job, I encountered some of their comments on the Jays.

 

http://www.rogers.com/cms/investor_relations/pdfs/quarterly/transcripts/Q2-2013-Transcript.pdf

 

The key part of it was what was said by Tony Staffieri, CFO:

 

Turning to our Media segment. The largest contributors to revenue growth for our Sportsnet properties, the Shopping channel and higher attendance at the Blue Jays games. Our total media revenue growth of 7% in Q2, the acquisition of theScore comprised about 140 basis points of that.

 

However, overall revenue growth at Media continue to be constrained by softness in the advertising markets across most divisions, underscoring the importance of our growing subscription revenues in this segment, tied to valuable content customers are willing to pay for.

 

Notwithstanding Media's strong cost efficiency improvement activities in the quarter, 2 specific items caused Media's adjusted operating profit to decline year-over-year. The first was the residual impact of the NHL lockout that compressed a large number of hockey games, specifically 34 more NHL games than last year, which Rogers Sportsnet produced and aired, driving significantly higher programming cost in the quarter.

 

The second item was the seasonal impact of increased Blue Jays player salaries, reflecting the strategic decision late last year to make investments in the depth of our baseball teams' talent.

 

While we continue to be optimistic about our team's successes in the field, the effort has proven successful in terms of boosting ticket sales. Blue Jays revenues were up a strong 27% from Q2 of last year and the financials are tracking to our plan.

 

The impact of these 2 expense items at Media was nearly $35 million. So as you can see, we're continuing to successfully execute around cost management initiatives across our Media properties, having offset significant portions of these items.

[Laika]

Funny how they are probably completely oblivious to the amount of money they are throwing away thanks to extremely inefficient baseball ops thinking

[Dick_Pole]

The corporation seems pretty happy that the team is on track to their budget - for now. I interpret this as AA and Beeston's jobs are safe in the near term. Reading this and the rest of their transcript, I'm not sure how much more willing the corporation is with continuing to open up the purse strings beyond what it has already done. When looking at it within a greater context, Rogers' Media division stands out like a sore thumb in terms of costs going out of control. Every other division is cutting costs or are relatively flat because the company isn't gaining a lot of traction in terms of revenue.

 

They admit than $35M goes to the lockout programming and the Jays. The good news is that there's no NHL lockout next year so they could use that money to slightly increase the Jays payroll and still have it look like costs are contained within the Media division.

[Arkadium]

Interesting

[Nox]

Are they actually going to be surprised when April/May attendance and viewership in 2014 are nowhere near what they were this year?

[Dick_Pole]

Are they actually going to be surprised when April/May attendance and viewership in 2014 are nowhere near what they were this year?

 

That's what I'm thinking about. When s*** hits the fan that's when AA and Beeston might have the noose around their neck but by then it could be too late.

[Laika]

Are they actually going to be surprised when April/May attendance and viewership in 2014 are nowhere near what they were this year?

 

Offseason plan:

 

- Trade way too much for package of Rickie Weeks, John Axford, and Yovani Gallardo / Kyle Lohse.

- Photoshop terrible Sportsnet Magazine cover

- Put more red maple leafs on Jerseys

- Get a T Hip song for all advertisements

[Dick_Pole]

Offseason plan:

 

- Trade way too much for package of Rickie Weeks, John Axford, and Yovani Gallardo / Kyle Lohse.

- Photoshop terrible Sportsnet Magazine cover

- Put more red maple leafs on Jerseys

- Get a T Hip song for all advertisements

 

The issues we have to face as fans of a team owned by a public company that must answer to shareholders, capital market analysts, and a bunch of other people who don't know a thing about baseball nor do they care.

 

Beeston and AA could get away by slapping lipstick on a pig and creating enough hype to reel in casual fans and the $$$ for a while longer. It's very risky way of doing things. There's a chance it could gain traction and the Jays end up getting enough of a payroll leash to buy just enough players to have an inefficient but playoff-bound team. Or it could go the other way...the way the team is currently headed.

[Angrioter]

Offseason plan:

 

- Trade way too much for package of Rickie Weeks, John Axford, and Yovani Gallardo / Kyle Lohse.

- Photoshop terrible Sportsnet Magazine cover

- Put more red maple leafs on Jerseys

- Get a T Hip song for all advertisements

 

Add injured players draft 2014.

Extend JP contract.

[FireAlexAnthopoulos]

The Jays will never win another championship until Rogers sells the team to an owner who cares.

[Laika]

The issues we have to face as fans of a team owned by a public company that must answer to shareholders, capital market analysts, and a bunch of other people who don't know a thing about baseball nor do they care.

 

It just seems kind of ironic. You'd think that the best entity to own a baseball team in this era would be a large corporation with no baseball background. They would be outside of all of the traditional misconceptions that plague baseball from the inside out. They would be solely concerned with the bottom line, which should lead to an intense constant top-down audit of the entire team and budget management process.

 

.... but instead, they just hire Beeston and seem to be content in evaluating his performance and expertise by examining the bottom line quarterly.

 

It's Fukudome'd, I tell ya.

[Dick_Pole]

It just seems kind of ironic. You'd think that the best entity to own a baseball team in this era would be a large corporation with no baseball background. They would be outside of all of the traditional misconceptions that plague baseball from the inside out. They would be solely concerned with the bottom line, which should lead to an intense constant top-down audit of the entire team and budget management process.

 

.... but instead, they just hire Beeston and seem to be content in evaluating his performance and expertise by examining the bottom line quarterly.

 

It's Fukudome'd, I tell ya.

 

Definitely agree with you, except that often happens in times of cost cutting. It's interesting because it's happening in every Rogers division except Media right now. The Blue Jays were treated as a "growth corporation" and if anyone is familiar with growth corporation strategies, you know a lot of money can get spent inefficiently in an attempt to increase revenues as much as possible. The Media division is having its own little version of of the internet boom that skyrocketed and crashed the NASDAQ in the early 2000's. The Blue Jays will eventually have an internal audit if they continue to lose and revenues don't pick up where they left off next year.

[Howard Roark]

It just seems kind of ironic. You'd think that the best entity to own a baseball team in this era would be a large corporation with no baseball background. They would be outside of all of the traditional misconceptions that plague baseball from the inside out. They would be solely concerned with the bottom line, which should lead to an intense constant top-down audit of the entire team and budget management process.

 

.... but instead, they just hire Beeston and seem to be content in evaluating his performance and expertise by examining the bottom line quarterly.

 

It's Fukudome'd, I tell ya.

 

...........until you remember that Rogers is a company that historically has only survived because they're in tight with the government and "compete" in an extremely restricted, closed-shop oligopoly that allows them to overcharge their customers and immediately buy out any potential competitors not named Telus or Bell, and when in the past they've even THEN ran into problems big daddy government is always there to hold their hand and slip a few twenties into their back pocket.

 

Old Boys Club and all.........

[Dick_Pole]

...........until you remember that Rogers is a company that historically has only survived because they're in tight with the government and "compete" in an extremely restricted, closed-shop oligopoly that allows them to overcharge their customers and immediately buy out any potential competitors not named Telus or Bell, and when in the past they've even THEN ran into problems big daddy government is always there to hold their hand and slip a few twenties into their back pocket.

 

Old Boys Club and all.........

 

Completely off-topic, but I work for one of those competitors in corporate finance and get a close up look at the industry. Ya ok the Big 3 make pretty good money but it's not THAT good compared to the banks ripping us off or the telecom companies down south.

 

Buying the spectrum costs billions. Building the network costs billions. Remember that Canada is a pretty freaking big country just to serve some 30M people or so with wireless services. Everybody wants their $500 Smartphone for free and if you add up the commission to the dealer each client signed up puts the company $700 in the hole. Then there's morons that rack up like $20K bills roaming in Europe or wherever that expect their bill to be significantly reduced. Yes the companies give clients credit back, but then they still have to pay the roaming costs to foreign company where the charges took place. I can promise you that on average the Big 3 do not make one penny on every client signed up at least for the first year.

 

The reason why these small time companies keep getting bought up is because they don't want to survive or can't. Most MVNOs exist strictly for the purpose of signing up clients under some sort of marketing niche then selling them to the Big 3 for big cash. That was their business plan from day one. Not to compete with the big guys and bring long term competition to Canada. And these new entrants like Wind and Mobilicity are dying out because there's truly no money to be made in the country doing what they do. Simple as that.

 

You don't want to get ripped off on your phone bill? Get a cheap plan, don't ask for the latest and greatest Samsung/Apple piece of crap for free and don't use the thing so damn much!

[Dr Negative]

Offseason plan:

 

- Trade way too much for package of Rickie Weeks, John Axford, and Yovani Gallardo / Kyle Lohse.

- Photoshop terrible Sportsnet Magazine cover

- Put more red maple leafs on Jerseys

- Get a T Hip song for all advertisements

 

You forgot having flashback days to when the team was good (Ed Sprague day anyone?).

[Olerud363]

Funny how they are probably completely oblivious to the amount of money they are throwing away thanks to extremely inefficient baseball ops thinking

 

That's why I harp on Beeston so much... I've been around this environment where you end up having a slick, not so technical guy (Beeston) giving a report about a fairly technical subject to a powerful suit. The suit has literally dozens of Beestons giving reports about various issues and it takes years to realize the Beeston guy is full of it. And by that time a slickster like Beeston retires or moves on. ......

[Howard Roark]

Completely off-topic, but I work for one of those competitors in corporate finance and get a close up look at the industry. Ya ok the Big 3 make pretty good money but it's not THAT good compared to the banks ripping us off or the telecom companies down south.

 

Buying the spectrum costs billions. Building the network costs billions. Remember that Canada is a pretty freaking big country just to serve some 30M people or so with wireless services. Everybody wants their $500 Smartphone for free and if you add up the commission to the dealer each client signed up puts the company $700 in the hole. Then there's morons that rack up like $20K bills roaming in Europe or wherever that expect their bill to be significantly reduced. Yes the companies give clients credit back, but then they still have to pay the roaming costs to foreign company where the charges took place. I can promise you that on average the Big 3 do not make one penny on every client signed up at least for the first year.

 

The reason why these small time companies keep getting bought up is because they don't want to survive or can't. Most MVNOs exist strictly for the purpose of signing up clients under some sort of marketing niche then selling them to the Big 3 for big cash. That was their business plan from day one. Not to compete with the big guys and bring long term competition to Canada. And these new entrants like Wind and Mobilicity are dying out because there's truly no money to be made in the country doing what they do. Simple as that.

 

You don't want to get ripped off on your phone bill? Get a cheap plan, don't ask for the latest and greatest Samsung/Apple piece of crap for free and don't use the thing so damn much!

 

I DO have a cheap plan; $30/month unlimited talk/text/data from Public Mobile. Only problem is they don't carry and decent handsets, thinking of switching to Wind or Mobilicity for this reason.

 

I purposely screwed both Bell and Rogers for $700 and $900 respectively a few years ago, told 'em to go f*** themselves when they offered to settle for like 20% of that. Credit score took a hit, but I don't buy anything on credit anyhow.

[Howard Roark]

Is there any way this doesn't happen without a payroll in excess of $150 million? Pretty long odds IMO.

 

They burned the casuals this year, I don't see them being so easy to fool for a second straight year, unless the team is in first place in late July. THEN they might start coming back. But it's going to be back to 20k a night for the first few months until they show something.

[Howard Roark]

Exactly. They can talk all they want about attendance/profits being up, but people aren't going to be so quick to return. Barring another huge offseason in which they sign a couple of Cano/Hart/Choo/Garza etc... and take payroll up towards 200M it will take a couple months of competitive ball to bring the fans back.

 

Speaking purely from my own first-hand experience, the buzz regarding the Jays was HUGE this past winter, people I know who never gave two f***s about the sport were suddenly trying to jump on the bandwagon so fast it made my head spin. It was the "in" team in the GTA again.

 

Now? the same dynamic is working in the opposite direction; everyone's dumping on them, how disappointing they've been........they're NOT going to be an easy sell next year. Ah well. Winning will solve that problem right quick.

 

However I don't really see us finishing higher then 4th next year. I think the Yanks or O's might fall off a little, most likely the Yanks, but that's it. Yay.

[Dick_Pole]

I DO have a cheap plan; $30/month unlimited talk/text/data from Public Mobile. Only problem is they don't carry and decent handsets, thinking of switching to Wind or Mobilicity for this reason.

 

I purposely screwed both Bell and Rogers for $700 and $900 respectively a few years ago, told 'em to go f*** themselves when they offered to settle for like 20% of that. Credit score took a hit, but I don't buy anything on credit anyhow.

 

lol...then you shouldn't be complaining...and there's a reason why Public can't offer you good handsets and will be going bankrupt soon as well as the others. Just wait until Verizon buys them out...then you'll REALLY get screwed. We are predicting over one year of limited customer service and no points of distribution (except maybe online/direct) for their acquired clients until they rebrand all the Wind stores and give you guys the middle finger big time in 2015.

 

You want to know how to REALLY get a great deal on your cell plan? Work for one of the big 3. Free phone, unlimited data, roaming, whatever you want because it all just gets charged to a cost center that nobody audits

[Dick_Pole]

Exactly. They can talk all they want about attendance/profits being up, but people aren't going to be so quick to return. Barring another huge offseason in which they sign a couple of Cano/Hart/Choo/Garza etc... and take payroll up towards 200M it will take a couple months of competitive ball to bring the fans back.

 

Hockey season is out in full force this year. There's not going to be enough the Jays can do to create buzz then. Jose Reyes, R.A. Dickey and even Josh Johnson carry a lot of star power. Those are names known to casuals, well Dickey was after his Cy Young award at least. Outside of Cano and maybe McCann there's not a lot of names known to casuals. I don't think signing Garza would create much off-season buzz and ticket sales. The easiest route to creating buzz for them would actually be signing Halladay imo.

[Howard Roark]

lol...then you shouldn't be complaining...and there's a reason why Public can't offer you good handsets and will be going bankrupt soon as well as the others. Just wait until Verizon buys them out...then you'll REALLY get screwed. We are predicting over one year of limited customer service and no points of distribution (except maybe online/direct) for their acquired clients until they rebrand all the Wind stores and give you guys the middle finger big time in 2015.

 

You want to know how to REALLY get a great deal on your cell plan? Work for one of the big 3. Free phone, unlimited data, roaming, whatever you want because it all just gets charged to a cost center that nobody audits

 

Yeah I was wondering about that, Mobilicity almost got sold to one of the big boys a few months back, but the CRTC almost gave me a heart attack by ACTUALLY RULING IN FAVOUR OF THE CONSUMER FOR THE FIRST TIME EVAAAAAAAAH!!!!!111111!

 

They're all f***ed by 2015 you say? Crap. lol

[Terminator]

The second item was the seasonal impact of increased Blue Jays player salaries, reflecting the strategic decision late last year to make investments in the depth of our baseball teams' talent.

 

So basically AA was forced to expand payroll to improve the team all in one offseason. A directive from ownership like that brings a little clarity to his moves IMO. Also, it shows that it's not really all that fair to criticize him for not slowly adding big pieces (like Darvish) over the course of 2 to 3 offseasons. This board seems to completely ignore the role that ownership plays in building a team and I'm not sure why. Every GM from Cashman to the Beinfest has to deal with ownership when constructing a team. AA is no different.

[Howard Roark]

The easiest route to creating buzz for them would actually be signing Halladay imo.

 

If that doesn't happen I'd be shocked. Well, if we didn't TRY to, anyhow. He might now want to return.

 

McCann, Cano and Garza would be the dream offseason if we're going to commit to going full derp with this old roster, high-payroll no-farm BS.

[jays_fever]

True. This is the route I'm expecting them to take. Halladay, Morneau, and then a clozer like Rodney or Uehera. A very calculated spinning of the wheels.

 

I almost want them to sign Rodney, just to see the fallout when he blows up, and people start attacking his character with his slanted cap, and arrow thingy.

[Terminator]

I almost want them to sign Rodney, just to see the fallout when he blows up, and people start attacking his character with his slanted cap, and arrow thingy.

 

Huh? That makes little sense.

[Nox]

So basically AA was forced to expand payroll to improve the team all in one offseason.

 

That's not what happened at all. This "strategy" was entirely put forth by Beeston and the rest of baseball ops.

[Howard Roark]

That's not what happened at all. This "strategy" was entirely put forth by Beeston and the rest of baseball ops.

 

Isn't that what Terminator was implying? The way I interpret what he wrote, you agree with him on that score.

 

For the record, I'm a believer in that too. AA's 180 degree turnaround in modus operandi was just inexplicable unless you believe he was forced from The Board, through Beast-tonne to do this, to build a "winner" quickly, The Plan be damned.

[Boxcar]

Completely off-topic, but I work for one of those competitors in corporate finance and get a close up look at the industry. Ya ok the Big 3 make pretty good money but it's not THAT good compared to the banks ripping us off or the telecom companies down south.

 

Buying the spectrum costs billions. Building the network costs billions. Remember that Canada is a pretty freaking big country just to serve some 30M people or so with wireless services. Everybody wants their $500 Smartphone for free and if you add up the commission to the dealer each client signed up puts the company $700 in the hole. Then there's morons that rack up like $20K bills roaming in Europe or wherever that expect their bill to be significantly reduced. Yes the companies give clients credit back, but then they still have to pay the roaming costs to foreign company where the charges took place. I can promise you that on average the Big 3 do not make one penny on every client signed up at least for the first year.

 

The reason why these small time companies keep getting bought up is because they don't want to survive or can't. Most MVNOs exist strictly for the purpose of signing up clients under some sort of marketing niche then selling them to the Big 3 for big cash. That was their business plan from day one. Not to compete with the big guys and bring long term competition to Canada. And these new entrants like Wind and Mobilicity are dying out because there's truly no money to be made in the country doing what they do. Simple as that.

 

You don't want to get ripped off on your phone bill? Get a cheap plan, don't ask for the latest and greatest Samsung/Apple piece of crap for free and don't use the thing so damn much!

 

Wind is dying out? Verizon just offered 700 million to buy them. Tons of people are flocking to them, hard to beat a 30 dollar unlimited everything plan with no cancellation penalties.

[Terminator]

That's not what happened at all. This "strategy" was entirely put forth by Beeston and the rest of baseball ops.

 

Hmm after reading it again it is ambiguous as to who's idea it was to make the "strategic decision late last year to make investments in the depth of our baseball teams' talent." Since this is a Rogers report I understood it as the "investment" being made (it is their money after all) was a strategic decision made by Rogers. To me, that explanation seems to make the most sense.

 

That said, it's open to interpretation and the idea could have originated with AA who then convinced ownership to make the decision.