Wayne Gretzky and MLSE: ‘why do they need Wayne?’

Toronto's abuzz over word that The Great One may be among an ownership group that will bid to purchase shares in Maple Leafs Sports and Entertainment Inc. (MLSE). Alas, it appears to be nothing more than chatter.

Last week it emerged retired National Hockey League (NHL) superstar Wayne Gretzky might be buying a slice of the NHL's most successful franchise, sports media outlets trumpeted

But The Globe And Mail dismissed the possibility of no. 99 being involved with any bid to buy the Leafs. And as Yahoo! Canada Sports points out, Gretzky doesn't have the C$1.7 billion required to invest.

In a way, it's too bad. Most Leafs fans would be giddy at the thought of Wayne Gretzky leading MLSE (presumably to a Stanley Cup berth) and just think of the merchandise sales that would've ensued if no. 99 Gretzky Leafs jerseys were officially up for grabs.

"When you have a faceless bid there needs to be a popular person involved and Wayne's name seems to come up a lot," says Bob Stellick, a former director of business operations for the Maple Leafs and president of Stellick Marketing & Communications Inc. in Toronto. "He is the most famous hockey guy currently not working."

Gretzky had been a co-owner of the Toronto Argonauts Canadian Football League team in the early 1990s and more recently he had a stake in the fiscally challenged Phoenix Coyotes hockey club.

"With all due respect to Wayne Gretzky, when he played he was the perfect guy to go to L.A. to help hockey be successful in the wasteland of California. When he went to Phoenix, the hope was he could do the same thing," Stellick says. "But he didn't have the name recognition in Phoenix that he had in established hockey markets. Unfortunately for him, Phoenix was not successful. Even getting into coaching certainly didn't enhance his post-career hockey reputation."

Keith McIntyre, CEO, K.Mac & Associates Inc. -- a marketing and sales agency in Burlington, Ont. -- says the initial thought that crossed his mind when the Gretzky rumour emerged was 'why do they need Wayne?'

"MLSE has done a great job of creating value for its shareholders, specifically for the Ontario Teachers Pension fund," says McIntyre.

"The way they've grown that business from being a hockey team through to the enterprise that they are now with multiple real estate and business holdings, it's a great time for them to sell and it has been on the table for about a year," he says.

But a purchase will only come one of two ways: from an investment group such as Providence or an independent business-owner in the billionaire range. Both of which are few and far between.

"I understand the need for an investment group to create awareness and attention to their efforts and trying to connect hockey with an American firm. Having said that, I don't understand the relevance of having Wayne there. At the end of the day these guys are about driving profitability. What role would (Gretzky) play in Toronto? He never played here."

The Great One's post-hockey ventures

Overall, Gretzky has done well post-retirement from a business perspective, McIntyre says. Mike Barnett and IMG Worldwide did a fine job of managing Gretzky's endorsements when there was a lot of perceived value, but his investment record has not gone unblemished.

"Since his retirement, my understanding is the winery is holding its own. The Argos ownership is now history and that didn't work out well as we all know especially with the Bruce McNall connection," he says, adding the real key is focus.

"If he's going to continue to pursue endorsements, it's critical to have a strategy set up for that. If he does so just for the sake of revenue, that'll definitely tarnish the equity and value of him."

Of the Great One's involvement with Wayne Gretzky's 99 Restaurant chain, Stellick adds the retired NHL star simply licenses his name and brand to the Bitove group, a venture that has gone well for both sides of the equation.

"It's very difficult for athletes to make that transition into the business world," he says. "The most success athletes have (post-career) is trading off their name or personal brand. The ones that are most successful are the ones that manage it very carefully.

"The challenge for anyone buying a more mature business like MLSE is how much runway is left? Are you buying it for the profit it's currently generating or are you buying it because you think there's still growth? A Maple Leafs ticket is twice as expensive as a (Stanley Cup champion) Boston Bruins ticket. The elasticity of demand is at the high-end for MLSE right now."