Does Argos owners Sokolowski and Cynamon's interest in NHL team mean they've outgrown the CFL?
It is one thing to own a Canadian Football League team. It is quite another to own a National Hockey League team.
It’s the difference between owning a retail store that is part of a modest national chain versus owning a franchise that is part of a high-profile North American chain.
Back in the 1980s, St. Louis Blues owner Harry Ornest bought the Argos, and then years later sold to Bruce McNall, owner of the Los Angeles Kings.
In what may become a reverse of that trend, current Argos owners David Cynamon and Howard Sokolowski are entertaining the idea of buying the Phoenix Coyotes, currently in the hands of the NHL following the messiest bankruptcy hearing in modern sports history.
The Argos are a team in decline, at least in terms of the product on the field, having failed to make the playoffs this year and last. If Cynamon and Sokolowski are considering selling the team after a six-year run, the value is likely low, not unlike when they bought the franchise late in 2003 for some $2 million. Then the Argos had fallen into the CFL’s lap, and it represented a relatively good time to buy, although more for sporting than business reasons.
This is a team from which few owners in the past 20 years have been able to make money. It has a limited audience and is, at best, a break-even proposition, at worst capable of losing between $2 million to $4 million a year. (Because it’s a privately owned team, the financials are not available.)
Certainly, it’s not like Saskatchewan, which back in 1997 was on the brink of financial ruin and is now a tremendous Canadian success story, turning a relatively high profit of $1.8 million last year and likely in line to equal, if not succeed, that mark this year. A combination of winning the Grey Cup in 2007 and maintaining that on-field quality and matching it with brilliant marketing has made this the model franchise of the CFL.
So if the Argos owners are looking to bail – and they have issued statements to the contrary – why would they want to buy the Coyotes, a franchise with meager fan interest and annual losses in the past few years of between $25 million to $35 million? Well, similar to the Argos, the price is right and Cynamon/Sokolowski might believe they can do a better job than the previous owner. Of course, the economies of scale are dramatically different.
And as has been speculated, the Argos owners, who apparently have assembled a consortium to share in the financial load, are likely looking to move the team at some point, possibly to Toronto or Southern Ontario in a few years. Cynamon and Sokolowski have a network of contacts and relationships with the major financial players in Toronto, notably the all-mighty Maple Leafs Sports and Entertainment Ltd. Maybe the Cynamon-Sokolowski faction could make inroads in Toronto or Southern Ontario that Jim Balsillie couldn’t.
Similar to when they joined forces to buy the Argos, Cynamon and Sokolowski know the value in lying low and doing their business the politically correct way. When the time is right to go public, they will do so. They will not, however, seek attention until they have formally secured the franchise. That’s the way they do business.
One thing is for sure: The Argos are like the mom and pop store on the corner that has survived it all. They are, as they like to trumpet in their dutiful media releases, North America’s oldest professional football club. Even if Cynamon and Sokolowski decide to part ways with the team, some good soul will step in allow the Argos to continue to operate.
