Rogers and Bell: Running the Toronto Maple Leafs Like a Business (Update 1)

Updated from 7:58 a.m. Jan. 11, 2013 with Brian Burke's reaction to firing.

NEW YORK ( TheStreet) -- Shortly after the National Hockey League lockout ended, the league's most valuable franchise fired its President and General Manager. The Toronto Maple Leafs ousted Brian Burke.

Shock over "the timing" of the decision colored consensus across the hockey media, even in Canada. As a Leafs fan, who likes Burke, I was hardly surprised. With Rogers Communications ( RCI) and BCE ( BCE) (formerly Bell Canada) now in charge of the club, the move, while not expected, certainly didn't come out of nowhere.

Toronto Star sports columnist Damien Cox got it (pretty much) right ( read the column at The Star's Web site):
Burke got the axe Wednesday morning because Bell President and CEO George Cope, after months of campaigning for Burke's dismissal, finally wore out the Rogers suits and Leafs minority owner Larry Tanenbaum ... Cope didn't like Burke's style, his manners, his profanity, his lifestyle.

Big shocker! A corporate suit like Cope doesn't care much for a crude Irishman who, rumor has it, likes to have a drink every now and then ( cough, cough, wink, wink). Burke's a loose cannon. That's not going to fly when Rogers and Bell own 75% of Maple Leaf Sports and Entertainment.

Despite getting that part right, Cox showed ignorance vis-a-vis the Rogers-Bell relationship:
This is the first really big sports decision undertaken by the partnership of Bell and Rogers that now controls Maple Leaf Sports and Entertainment. Not only was it done in such a way that should make Leaf fans very worried, it may also be an indication why this corporate partnership of media rivals is destined not to last.

Rivals. I love it!

Rogers and Bell are rivals like Apple ( AAPL) and Amazon.com ( AMZN) are mortal enemies.

Loose similarities actually exist between the two sets of partners the media likes to hysterically paint as foes. You know the deal with Apple and Amazon. They both make hardware. They both provide excellent user experiences via smart and seamless ecosystems. And they scratch each other's backs feverishly.

Apple devices dominate mobile e-commerce traffic. A significant chunk of that activity, if not a vast majority, happens in the Amazon online store. The numbers from the holiday period clearly support this contention.

Things might be even more symbiotic between Rogers and Bell. The two companies simply have to act like "rivals" to keep regulators off their tails. They both want the same thing from their joint ownership of MLSE and every other area they nearly monopolize in Canada -- mobile, cable/satellite, media -- you name it.

Leafs fans should be thrilled that Rogers and Bell control the team now. We might finally make the playoffs. Yes, "we." I'm a fan. Have been for a while. In fact, I just put a new profile picture up on Twitter ( check it out!). This one just missed the cut. Cramer didn't like it:

By firing Burke, especially when they did it, Rogers and Bell send the message, even if unintentionally, that we're running this thing like a business. If you don't win, we don't have time for your antics.

We need to start running governments like businesses. Same goes for hockey franchises where salaries have risen exponentially over the last decade. Hopefully Rogers and Bell model the Leafs after the Oakland A's of Brad Pitt fame. Play some Moneyball.

While Rogers and Bell certainly care about EBITDA, they want the Leafs to win. Because, if the Leafs win and make the playoffs, they make loads of money.

Last season during the NHL playoff run, I wrote an article about one of my favorite stocks, Madison Square Garden ( MSG). In Sell Madison Square Garden If the Rangers Lose?, I pointed out that MSG nets $1 million in income for every playoff game it hosts.

MSG owns the New York Rangers. It owns the regional network that carries the games. It owns the arena the Rangers play in. All of the above, plus content delivery, for the Rogers/Bell consortium. That iPhone you take with you to the game, they probably own the three-year (yes, three-year, not two) contract you signed to make yourself feel like you were getting a deal.

They own everything. Unlike the former owners of MLSE -- a teachers' pension fund -- Rogers and Bell will not be happy without postseason hockey in Toronto. They want it badly. It will drive revenue. It will drive profit. It's the crown jewel, the main reason why they did the MLSE deal in the first place.

To recognize the synergies possible when you own the team, the venue and practically the entire sports and entertainment media landscape in a country that's crazy about hockey.

Cox also scored the first interview with Burke after his dismissal. He'll stay on with the Leafs as a senior consultant.

Immediately after receiving the news he was out, Burke picked his 7- and 8-year-old daughters up from school. On his first full day without the President/GM gig, he got up at 4:30 a.m. to exercise, hit Starbucks ( SBUX) twice, dealt with a smashed car window (he's not sure if a disgruntled fan did the damage) and went to a matinee of Jack Reacher, by himself.

Burke says he's "stunned" by the firing:

I was floored, and I still am stunned. I've never been fired before . . . I think I can help. I've been at this for a while. I have my name on the Stanley Cup. I'll do whatever I can . . . I wish Dave (Nonis) and the Toronto Maple Leafs all the success in the world. I'll do my best to help them win.

For the record, I still love all three stocks -- BCE, RCI and MSG -- despite considerable runs for the latter two.

BCE Chart BCE data by YCharts

Some regulatory issues, unrelated to MLSE, have held Bell back a bit, but it's as strong of a long-term play as RCI. Investors have to yet to recognize the upside potential in this MLSE deal.

MSG is a nice lower-level U.S. case study to help illustrate what Rogers and Bell have going for them in Canada. I like MSG this year no matter what happens, but I expect a big media company, quite possibly News Corp ( NWSA), to at least try to take them out.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

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