A damning report on Toronto issued by Robert Elstone was put together by two close external allies of the Super League Executive Chairman.
A paper sent to the Super League clubs that appraises the commercial opportunities for Super League in Canada was created by a four-man committee, including Elstone himself, whose opposition to Toronto’s return has been well-documented.
Also on the panel was Andy Anson, the current CEO of British Olympic Association, and Matthew Wheeler, a managing partner of Sports Investment Partners.
Both panellists have long standing ties with Elstone, who was also appointed to the four-man committee.
Anson was formerly the chief executive of sports retailer Kitbag, who were the retail provider of Everton FC when Elstone was the club’s chief executive.
Elstone negotiated a new kit deal with Nike in 2013, which was negotiated in collaboration with Anson and Kitbag.
Meanwhile, Wheeler was successful in the sale of Liverpool Football Club to Fenway Sports Group in 2010 and is another former Premier League associate of Elstone.
Both were appointed to the committee as independent advisors.
The fourth board member is RFL chairman Simon Johnson. However, League Express can reveal that Johnson sent an email to clubs in the aftermath of the paper being distributed suggesting he would not have advised against Toronto’s return had he seen the club’s resubmission first.
“I have only had time so far to look through Section 1- The Carlo Livolsi Introduction letter,” he said.
“I do wonder whether, had that letter been available to the Committee looking at the commercial potential, it would have been a relevant document. I accept that it might not have changed the opinions of our independent colleagues, but it might have given me pause and affected my position.”
The RFL is expected to vote in favour of the Wolfpack’s return.
The report, which has been seen in full by League Express, strongly recommends against Toronto’s return and contrasts with many of the points raised by the Wolfpack arguing for their return in their revised submission.
In conclusion, the report reads: “In general, the Committee considered Super League expansion in Canada would not make strategic sense unless it was backed by long term strategic and financial commitment by the IRL (International Rugby League) to Canada. In that regard, the Committee noted that the IRL has no strategic focus on Canada, or current commitment to Canadian expansion.”
It continued: “The Committee considers that it is highly unlikely that operating in Canada will deliver incremental financial benefits to Super League.”
In an expanded conclusion, it cites ten points underpinning that conclusion.
1. Canada has historically provided limited TV revenue to Super League, of between $7,500 – $10,000 US per year, increasing to $15,000 in 2020 following negotiation of a new deal. This was not materially impacted by TW joining the English Rugby League set up.
2. Expert advice from FMS indicates that a Canadian team in Super League will not generate a significant uplift in broadcast values in the foreseeable future, and that at least part of any such uplift would be consumed by increased costs. Indeed, FMS advised that greater, though still incremental, returns were more likely to follow from further expansion in France or beyond the UK heartlands.
3. Based on the existing state of the Canadian broadcast rights market and the historic
experience of Super League rights fees in Canada, FMS has estimated that even with a Canadian team in the competition Super League is unlikely to obtain rights fees of more than $30k US per annum in the short to medium term.
4. In Rugby Union, the Six Nations is understood to receive $150k US per annum and Premiership Rugby (PRL) and Pro 14 are understood to generate between $50k – $75k US per annum. This indicates that Canadian broadcasters are unlikely to make a significant investment in rugby properties of either code.
5. The challenges faced by small and/emerging properties in attracting sponsorship revenues have been exacerbated by the Covid-19 pandemic, and suggest that Super League, and any Canadian Super League team, will be unlikely to attract material Canadian sponsorships. This view is reinforced by the failure of TW to attract a major fee-paying sponsor to date, as well as the existence of a heavily saturated Canadian sports market.
6. Canada is a heavily saturated sports market, and many of the established sports are wealthy professional sports with more ability to attract sponsors than Super League. It will be very difficult for Super League to compete for sponsors with these sports.
7. There is insufficient Rugby League infrastructure below the professional level in Canada to support a professional team and a well-established professional sporting hierarchy in place. In this regard, Rugby League is dwarfed by not just the established Canadian/American sports such as the NHL, CFL, and NBA but also by Canadian Rugby Union. As a result, Super League will face significant challenges in competing with such sports for sponsor and broadcast revenues.
8. The Committee examined the TW case study to see if it indicated that other aspects such as new fans, social media or media coverage might deliver material incremental revenue. Whilst it is clear that TW has had some success in creating a promising fan base in a short space of time however, the Committee has been unable to conclude that the identified ‘other areas’ would generate a material incremental commercial return for Super League if it operates a team in Canada. Leaving aside key questions of how media articles etc. can translate into realisable revenues, information provided by Nielsen demonstrated that the TW did not in fact outperform (and in key metrics actually underperformed) its Super League peer group (all of whom operate in much smaller markets) in social media, media coverage, or broadcast value to Super League sponsors.
9. The Committee considered case studies of successful Club based expansion to new territories in Wellington Phoenix FC and the NZ Warriors Rugby League team. However, it felt that the material differences of these to the Canadian Super League proposition meant that such case studies could not give Super League any confidence that a Canadian operation would result in any material revenue gain for Super League in the near to medium term.
10. The Committee’s research indicated very few examples of sports leagues expanding
successfully into new markets and where the very limited successes exist, it is in
geographically adjacent markets with a history of the sport being played in the market. Whilst Rugby League has always been innovative and in many respects a leader in sports
development, the Committee noted that even the richest sports leagues that have spent
decades investing in and building a new market have not succeeded in creating new teams in distant, new markets.
However, the integrity of the document has been called into question while criticisms of conclusions have been raised.
The reports fails to acknowledge the World champions, Australia were due to play the Wolfpack as a warm-up for their Test series against England later this year, yet claims there is no focus on growth in Canada. Toronto also sent a 28-page strategy, produced by Canada Rugby League detailing plans for growth of the game, in their revised report.
Furthermore, the report went on to acknowledge the Wolfpack’s good, in stadium attendances but questioned the legitimacy of the numbers, as well as how many were paying fans, though showed no proof to back up those claims.
Despite Elstone’s strong recommendation to vote out Toronto, there is a growing belief they could in fact be reaccepted to Super League next year, a decision that would inevitably leave Elstone’s future in serious doubt.
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