Hearing ‘We the North’ as Your Team Loses? Blame Canada

Hip hop music pounds through the air, fireworks explode and the rallying cry of the Toronto Raptors basketball team erupts in the Air Canada Centre: “We the North! We the North! We the North!”

It’s fan appreciation night at the arena the Raptors share with the National Hockey League’s Toronto Maple Leafs, and the 20,000 fans on their feet show Canadians are into more than just ice and pucks.

Canada’s biggest cable companies went all-in on hockey three years ago, joining to buy the Maple Leafs in a $1.3 billion bet that selling Canadians more ways to watch their favorite sport would boost business. As the Maple Leafs collapse on the ice and television ratings on some nights falter, the basketball team that came as part of the deal is proving to be a surprise windfall for BCE Inc. and Rogers Communications Inc.

The National Basketball Association team is providing fans with its best performance since its creation two decades ago: first place in their division this year and their first playoff run since 2008 last year. Top players DeMar DeRozan and Kyle Lowry have been voted all-stars the past two years.

The “We the North” advertising campaign, which features a collage of gritty urban streets and snow-covered outdoor courts, while embracing the Canadian team’s outsider status in the NBA, has won a sports marketing award. Toronto-born rapper Drake sits courtside and adds to the cool factor as the team’s “global ambassador.”

Doubling Merchandise

The Leafs meanwhile, haven’t won the NHL’s Stanley Cup since 1967 and -- barring a miracle -- will miss the play-offs for the ninth time in the last decade after a franchise-record 11-game losing streak.

“The feeling right now is that the Raptors have arrived,” said Dave Hopkinson, chief commercial officer of Maple Leaf Sports & Entertainment, the company that owns the Leafs and the Raptors. “It’s our 20th season so it took us a little longer than we might have liked, but it’s undeniable that it’s here now.”

The team’s fans have given back, doubling merchandise sales, giving the Raptors the fifth-best attendance in the 30-team league and selling more new season tickets than any club except LeBron James’ Cleveland Cavaliers, Hopkinson said.

Sabrina Monaco, a long-time Leafs fan who works in finance, paid C$10,000 ($8,000) for Raptors season tickets after watching a play-off game last year.

Unreal Vibe

“The vibe in the Air Canada Centre was unreal, nothing like I had ever seen before and it got us so pumped and excited to see the game,” Monaco said. “I literally went home that night and started researching season tickets.”

Forbes valued the Raptors at $920 million this year, up 77 percent from last year and the 14th-most valuable NBA team as tickets sales increased 7 percent. Forbes values the Leafs at $1.3 billion, the NHL’s most valuable team.

The Raptors’ share of revenue within Maple Leaf Sports is growing in proportion to the Leafs, Hopkinson said, declining to give specific numbers.

He credits the team’s success to its general manager, Masai Ujiri, the first Africa-born executive to hold that post in the NBA. Ujiri, who spent his teen years playing basketball in Nigeria, rearranged the Raptors’ lineup after MLSE Chief Executive Officer Tim Leiweke hired him from the Denver Nuggets in 2013.

After trading away Rudy Gay last season, the Raptors took off, winning the Atlantic division title before losing to the Brooklyn Nets in the first round of play-offs. With 36 wins and 17 losses, the Raptors are on pace for their best season in franchise history.

TV Ratings

Canada’s basketball kick goes beyond the Raptors. There are more Canadians playing in the league than ever before. Andrew Wiggins and Anthony Bennett of the Minnesota Timberwolves, both from Toronto, were the first overall NBA draft picks in the last two years. Wiggins picked up the Most Valuable Player award at the Rising Stars competition during the NBA’s annual All-Star festivities this weekend.

Average games are netting 320,000 viewers, up 60 percent from the same time last year and on track for a record for the team, said Phil King, president of BCE’s sports and entertainment programming, which has the rights to most of the team’s games.

Last year’s play-off games even rivaled some play-off hockey games in viewership. “That was unheard of before,” he said.

For BCE and Rogers, the increased advertising and viewers would be welcome, as both pointed to weakness in the TV advertising market during their fourth-quarter earnings reports.

Basketball Culture

BCE has been promoting basketball and other sports across its media properties after Rogers won national TV rights for NHL games with a C$5.2 billion 12-year deal with the league at the end of 2013, King said. “We’ve always said, win and they will come,” he said.

Ratings for the NHL’s all-star game meanwhile dropped 40 percent this year from 2012, the last time it was played, according to Numeris, a TV ratings agency. Viewership for prime time Saturday night hockey games fell 2 percent compared with last year, even as overall ratings jumped 7 percent, Rogers said.

It’s unlikely any sport will unseat hockey as Canada’s national pastime any time soon.

Hockey Country

A low rating for a Leafs game is about a million viewers, said Scott Moore, president of Rogers’ Sportsnet TV channels. A blowout Raptors game is 300,000 viewers, he said. Ratings for Wednesday night hockey games are up, he said by phone. “Canada is still first and foremost a hockey country.”

Rogers’ hockey revenue is in line with its projections and the company expects to make a profit during the playoffs, Anthony Staffieri, the company’s chief financial officer, said during a Jan. 29 conference call.

The Raptors’ success has helped fuel a basketball culture that’s likely to keep growing, even if the team runs out of luck on the court, said Dan MacKenzie, vice president and managing director of NBA Canada. “It’s almost like a snowball rolling down the hill,” he said.

Next year, the basketball world will descend on Toronto for the NBA all-star game, the first time it will be held outside the U.S. If the wins continue and the Raptors can cement their position as not just Toronto’s team but Canada’s, the sport’s presence will keep growing, King said.

“I’m in my 50s, and back when I was a kid the neighborhoods would be all hockey nets on the street,” he said. “I see very few of those now, it’s all basketball nets.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE