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Missed opportunity or dodged bullet? What Ohtani's L.A. pick means for Rogers

TORONTO — While baseball star Shohei Ohtani's decision not to sign with the Toronto Blue Jays over the weekend has left fans wondering what might have been, one sports economist says team owner Rogers Communications Inc.
Los Angeles Angels' Shohei Ohtani sits in the dugout during the tenth inning of a baseball game against the Detroit Tigers in Anaheim, Calif., Saturday, Sept. 16, 2023. THE CANADIAN PRESS/AP-Ashley Landis

TORONTO — While baseball star Shohei Ohtani's decision not to sign with the Toronto Blue Jays over the weekend has left fans wondering what might have been, one sports economist says team owner Rogers Communications Inc. is better off for having struck out.

Ohtani said Saturday he'd be signing with the Los Angeles Dodgers, with reports indicating his deal is worth a record US$700 million over 10 years, after a courtship process in which the Blue Jays were among the final suitors.

Off the field, some who study the business of sport were bullish on the potential payoff of such a deal for Rogers, saying the increased sales of tickets and merchandise could justify his salary. But Concordia University's Moshe Lander said that despite all the hype, Rogers likely dodged a bullet.

"The economic impact is … much, much smaller than people would have you believe," said Lander.

"Does it justify $600 million out of Rogers' pocket? I'm not convinced."

He said some of the potential boons for the company were overplayed. While Rogers could have raked in new revenue through advertising, especially given Ohtani's significant following in his native Japan, Lander said that wouldn't have been enough to offset the massive financial commitment for one player.

He said Japanese advertisers may have sought to associate with the Blue Jays the same way they did with the Los Angeles Angels during Ohtani's time with that team, however "that money doesn't exclusively go to the Blue Jays" due to the league's revenue sharing agreement between its 30 franchises.

"I'm struggling to see the financial case for why Toronto would want this," said Lander.

Others say Ohtani's presence in Canada could have opened new doors for Rogers.

While some may balk at the contract's price tag, Ohtani's value to Rogers — as both a baseball all-star and international icon — would have made the contract a worthwhile investment, said Norm O'Reilly, dean of the Graduate School of Business and professor of sport management and marketing at the University of Maine.

"In addition to on the field, there's an off-the-field benefit that's significant," he said.

"We'll all wonder about what it would have been. But I would never blame the club because there's so many structural disadvantages that Canadian franchises face in keeping talent versus some U.S. markets."

O'Reilly said Toronto sports teams have never had the type of "global superstar" that Ohtani represents, as a unique two-way pitching and hitting threat.

While big names such as Mats Sundin and Kawhi Leonard have made their mark over the years, Ohtani is more comparable to the level of international stardom reached by Michael Jordan or Lionel Messi, who "get attention from all over the place."

"There's a huge following that are currently in (Japan), where he's from and other countries around the world that will immediately go out and buy a Jays jersey, Jays cap, subscribe to stream Blue Jays games."

The biggest off-field impact that Ohtani could have brought is "the net new Japanese audience that the Jays currently don’t have in their base," plus the opportunity for Rogers to extend its core business of wireless and telecom, said Michael Naraine, associate professor of sport management at Brock University.

"Ohtani (would offer) Rogers an interesting leveraging piece for the brand to attract new customers, whether they are sports fans or non-sports fans. In particular, Ohtani appeals to an East Asian audience that continues to grow in Canada," he said.

"That audience begets a new broadcast rights deal in Japan that currently doesn’t exist and then Japanese advertisers that would want to align with the Jays new 'Showtime' story."

Naraine added there were "obvious" risks — if Ohtani was injured or didn't play up to his potential as he gets older — but maintained the economic impact for Rogers would have been "immense."

"Even if his novelty wears off domestically, it will sustain with the Japanese market so long as he says healthy and produces," he said.

While the Blue Jays' contention to land Ohtani may have seemed out of left field, O'Reilly said it's not surprising a major telecommunications company such as Rogers would have been in hot pursuit of the player.

Research shows that about four in 10 people in developed countries including Canada make decisions surrounding which brand of products they purchase at least in part based on their sponsorships in the sports and entertainment sector, he said.

"Rogers is not dumb, right? They would know the specifics and they would be doing an analysis," O'Reilly said.

"For those seven million people in the GTA who are getting a phone or deciding which phone to keep, that could make them stay (with Rogers) regardless of a price comparison."

But Lander questioned what Rogers could have gained by attracting new eyes on its brand around the world.

He said the company doesn't have the resources to break into international markets like the U.S. or Japan and that unlike other ownership groups, it doesn't sell a product that could be considered "global in nature."

"What exactly is it going to accomplish trying to advertise itself to the rest of the world?" he said.

"It's not the type of thing where you're going to want to take advantage of people looking up and saying, 'I wonder what Rogers is.' Even if people realize that it's Canadian media company, why would anybody around the world care about a Canadian media company?"

This report by The Canadian Press was first published Oct. 11, 2023.

Companies in this story: (TSX:RCI.B)

Sammy Hudes, The Canadian Press