Richard Peddie, President and Chief Executive Officer, The Toronto Raptors Basketball Club Inc.
THE FUTURE OF BASKETBALL IN TORONTO
Chairman: Gareth S. Seltzer, President, The Empire Club of Canada
Head Table Guests
David Edmison, Director, Martin, Lucas & Seagram and a Past President, The Empire Club of Canada; Jama Mahlalela, Grade 12 Student, Oakwood Collegiate Institute; Rev. Dr. John Niles, Minister, Victoria Park United Church; Shelly Thrasher, Special Assistant to MPP Jack Carroll; Borden Osmak, Senior Vice-President, Corporate Banking--Ontario, The Bank of Nova Scotia; The Hon. David Peterson, P.C., Q.C., Senior Partner, Cassels Brock & Blackwell and Chairman, The Toronto Raptors Basketball Club Inc.; Brian Bellmore, Director, Maple Leaf Gardens and (we hope) Director, The Toronto Raptors Basketball Club Inc. and Barrister and Solicitor, Bellmore & Moore; Larry Tanenbaum, President, Kilmer Van Nostrand, Co-Owner, Maple Leaf Gardens and (we hope) The Toronto Raptors Basketball Club Inc.; and Fredrik D'Arcy Eaton, T. Eaton Company and a Director, The Empire Club of Canada.
Introduction by Gareth Seltzer
Well, it has been a tumultuous couple of weeks for Raptor fans and a very exciting one for Toronto, basketball, hockey and city spirit. Toronto Raptor general manager Glen Grunwald was to be here, but as you can read in the Globe this morning, he has been a very busy man--completing the second of two blockbuster trades, this one with the Boston Celtics. The development of a renewed Raptor team is just part of the extraordinary developments at all levels of the basketball organisation, not the least of which is the deal with Maple Leaf Gardens and with Mr. Tanenbaum, Mr. Stavros and their colleagues. To the fan, like myself, it accomplishes several things.
Firstly, I want to see a winning team and this is most definitely a move in that direction. Secondly, it moves both the Leaf organisation and the Raptors into a new building--certainly a financially prudent decision. I will be at the Raptor game against Chicago tonight and I am reminded of Jerry Krause, the Bulls general manager, who said, after the Bulls moved into the team's new building, the United Center: "We lost a couple of games at home which we probably wouldn't have lost a couple of years ago, not because of the talent, but because of the inexperience of the building." With both Leafs and Raptors in the Air Canada Centre, it should get some good experience very fast! The third component of the recent changes relates to a strong ownership and management team. Pat Williams, the Orlando general manager, when assessing whether NBA executive Gary Bettman might become NHL president, said: "I gave Gary a hockey puck once, and he spent the rest of the day trying to open it." Here we have an enviable marriage of team-manship, management and ownership that bodes well for bringing the necessary skills for the production of winning teams.
One person who has been a player in the development of winners is Richard Peddle. After a number of years with General Foods, in 1983 Mr. Peddle was promoted to President of Hostess Foods and later left Hostess to become President and CEO of Pillsbury Canada, during which time the company almost doubled in size and enjoyed record earnings. After winning the coveted Donald McCaskill award for marketing excellence in Canada in 1989, Mr. Peddle accepted the top job as President and CEO of Skydome and in 1992 Peddle was chosen as the North American Facility Manager of the Year.
Mr. Peddle, you give the rest of us a bad name! Since 1996, Mr. Peddle has been President and CEO of the Raptors organisation--and it is in that capacity today, that I ask you to extend a warm welcome to Mr. Richard Peddle.
Good afternoon ladies and gentlemen. Over the last few months, there has been a lot written and a lot said about the fragile state of basketball in Toronto. You add to that the uproar over the departure of Isiah Thomas and Damon Stoudamire, the many changes in ownership, an 11 and 40 record and you would think the Raptors are only a slam dunk away from being as extinct as a Jurassic Park dinosaur.
To all of that I say: "Niet... no way... not a chance!" In fact, I take the completely opposite side of the argument. I strongly believe the Toronto Raptors Basketball Club can be right alongside the Leafs as Toronto's team of the 21st century.
Crazy? Not a chance, you say! I can understand your scepticism because when one looks at 40,000 kids playing MTHL hockey, consumer research clearly indicating that the Leafs are Toronto's favourite team and a sold-out Gardens, clearly, we at the Raptors have our work cut out for us.
To make you a convert to my way of thinking, let me explain six powerful points that support my hypothesis. The first point is that basketball is being played all over the world and this helps us in Toronto. By last official count, 11 per cent of the world's population was actively participating in the sport, second only to soccer at 13 per cent. That's right. Basketball's popularity is intensifying across every continent, from urban New York City to cities and villages in Korea and South America, to isolated native communities in Northern Ontario like Kesheshawan, a town located at the mouth of James Bay, where we actually conducted a basketball clinic last year and, importantly, the NBA is doing everything to accelerate that growth in awareness, interest and participation. There are regular broadcasts to over six hundred million households in 191 countries on 146 different telecasts, league offices in six countries and sell-out crowds at games in Europe, Japan and Mexico.
Against this backdrop now, think of the new Toronto. As Elaine Carey recently said in the Toronto Star: "The new Toronto is not just a newly amalgamated city; it's also a city of new Torontonians and dramatic shifts in immigration patterns are defining who we are." She went on to say that close to half the population of the new Toronto was born outside Canada and one in 10 (imagine, 10 per cent) have arrived in the past five years.
The Raptors therefore have a classic upstream marketing model operating here. Due to the excellent work of the NBA, basketball awareness and trial marketing plans involving mostly broadcast and merchandise, are reaching these people before they come to Toronto and thus, when they come to Toronto, they are well down the road to being avid basketball fans. Basketball--not baseball, not football--but basketball.
Now, you might say: "How can recent immigrants afford the big ticket prices of a typical NBA basketball game?" Well, the fact is that while most of Toronto's early immigrants were poorly educated, 58 per cent of today's immigrants have 13 or more years of schooling, including 16 per cent who hold a bachelors degree and we all know there is a positive correlation between education and income. In addition many of our new immigrants are famous for their work ethic and how quickly they carve out a good lifestyle in Toronto. Even though many new Torontonians cannot yet afford season tickets or a luxury suite, they can afford our single-game tickets in the five to twenty-one dollar range or attend as part of a group. For instance, in this week span, a Chinese group of over 500, a Philipino group of over 100 and a Greek group of 400 all will enjoy a Raptors game. If they still can't afford to come down to a game, watching our television broadcasts on CITY/New VR, or buying a t-shirt will contribute to helping us some day become Toronto's sport of the third millennium.
However, my enthusiasm for my bold prediction doesn't stop there because of the second point. Did you know that basketball participation across all Canadians (native and new) has showed significant growth in the last four years to the point where it is now the fastest growing team sport in Canada.
The highest growth area is among women and girls where the participation has grown 27 per cent between 1992 and 1995. Our research also indicates that basketball is already the most popular sport of teens in Toronto, that it is the second most popular sport of males 18-24 and interestingly, already the second most popular sport of females in Toronto. Can the key sports demographic, males 18-49, be far behind? We don't think so! And I'm not finished yet. My case for basketball and the Raptors' positive future continues.
The third point is that today's sports and entertainment consumers have changed. They're much busier, have less time for everything, are very value conscious and want the biggest, most complete bang for their entertainment buck. Their viewing habits have changed. They like interactivity and they like action and NBA basketball delivers on all counts. For instance, at two hours and only nine minutes, our games are shorter than baseball and hockey, both at three hours in duration. Combine that with a 7:00 start and our fans are home in plenty of time for a good night's sleep.
We also offer a total entertainment package instead of just a game. This is supported by our research that indicates that we outperform the other sports in town for entertainment value. The nature of our entertainment is more 21st-century as well. Urban hip hop music--Dance Pak, Ford Power Pack, mascot and many interactive fan promotions. A little busy, a little helter skelter I admit; but non-stop action just the same.
So, my third point is that our total entertainment package is the most attuned to the 21st-century consumer of Toronto's major sports.
My next three support points are more in the hard business vein.
First the NBA brand. The NBA brand is the one that's in the greatest demand today. It's the one kids know. Seventy-0ne per cent of teens worldwide are familiar with the NBA logo making it the most widely recognised of all North American sports leagues the world over. Youth around the world love NBA merchandise. Research indicates that an almost unbelievable one out of five teens worldwide own an NBA-licensed product. All of this because David Stern and 700 top-notch sports professionals have made it a very successful, youthful, contemporary and growing brand and with that core brand, the NBA has successfully line-extended. Just as you have Coke and Diet Coke and various line extensions of Tide detergent, the NBA has NBA.com, a very creative and incredibly busy web site. NBA League Pass is a direct broadcast satellite service that broadcasts 50 games a week. NBA Entertainment produces hours of entertainment programming on the daily activities of the NBA Its most recent line extension is the WNBA--a women's professional league involving eight teams that significantly exceeded attendance and television audience expectations in its inaugural year. It will add two more teams this summer and two more teams the summer of 1999 (one of those in Toronto, we hope). Two other line extensions currently in planning include a retail store and an NBA themed restaurant. The store in New York is located on 5th Avenue, opens this September and if successful, will be rolled out nationally. The themed restaurant will open in Orlando early in 1999 and will be located at the main gate of the "New Islands of Adventure" theme park. The NBA brand is therefore one of the strongest reasons for basketball's long-term success in Toronto.
My second last point has to do with the activities of last week that saw Allan Slaight sell majority control of the Raptors to Maple Leaf Gardens. Allan Slaight was a great owner of the young Raptors and very committed to their success. However, he recognised that for the team to realise its Championship Vision, it had to be owned by investors with the financial resources to make it a winner. Steve Stavro, Larry Tanenbaum, Ontario Teachers Pension Plan Fund and TD Capital definitely fit that bill and my meetings to date with the new owners strongly indicate that they are very committed to growing the sport of basketball and bringing an NBA Championship to Toronto and, we hope, a WNBA Championship to Toronto as well. The purchase of the Raptors and Air Canada Centre also ends what could have been a very ugly arena war where each building would have kicked and scratched for 150 events a year instead of one building hosting 250 plus of the most popular and profitable events. As Ken Fidlin so correctly pointed out in his recent article in the Sun: "Both teams will enjoy a dramatic increase in cash flow while sharing the capital costs of one building, not two." Ken also went on to say: "By sharing the financial burden, it means there will be a greater chance that both teams will be more able to compete with the big market teams in the free agent pool, where salaries continue to escalate." Amen, Ken Fidlin.
And finally--point 6. Air Canada Centre--The Theatre of Sport and Entertainment--was built out of the remnants of the historical Postal Delivery Building, combined with the state-of-the-art amenities of today's new arenas. Air Canada Centre will truly be one-part history and one-part new millennium. It will also mean that fans will be watching games in a stadium designed for basketball, not baseball, with an atmosphere to match the up-tempo approach of NBA basketball. The new Air Canada Centre has an arena that was going to be great even before Maple Leaf Gardens purchased it. Now, with the new owners' commitment to invest an additional $25 million, it will easily be the finest sports and entertainment venue in Canada.
Six positive backdrop points don't by themselves guarantee the Raptors long-term success! Let me share with you how the Toronto Raptors plan to build upon those opportunities to grow the sport during the next few crucial years.
Taking a page out of the MTHL, we have created Bell Raptorball. This year, 5,000 youths (7-16) will play in community basketball leagues sponsored by Bell and the Raptors. The Utah Jazz has over 70,000 kids playing in a similar programme and that's our long-term goal: let's get the kids playing the sport. Another opportunity is Raptorfest-Canada's largest 3 on 3 Tournament with over 600 teams participating. This year we are joining with the NBA and hope to have over 1,000 teams participating in the three-day event. One day we hope to match Chicago's 3 on 3 Tournament which attracts 2,300 teams. Speedy Youth Clinics are five-day clinics offered free to Toronto youth to teach them the finer points of basketball. Sprite Jammin' with the Raptors consist of visits to 19 schools each year where Raptor players conduct interactive clinics.
Another important awareness and education tactic is our basketball education on CITY/New VR All our broadcasts carry an education component to assist viewers with the nuances of the game and our announcers, Leo Rautins and John Saunders are mindful that while calling a game, they have an education responsibility as well. Most recently, we launched a new educational initiative in the Toronto Star called "You don't need to play to be a fan." Not only are we running a series of five different ads explaining the game but on February 28, we will distribute 700,000 pamphlets like this in the Saturday issue of the Star, and another 100,000 through Blockbuster Video outlets.
As you can see, our organisation is working very hard to develop basketball in Toronto. We at the Raptors know positively that NBA basketball can be a tremendous success in Toronto. If the Raptors organisation and its new owners execute only average awareness, interest and participation plans, then our success will take a little while. However, if we execute our plans exceptionally well (and I know that our existing organisation is capable of that) and when Butch Carter and Glen Grunwald start moving our team towards an NBA Championship, then our success will be far faster than anyone ever imagined and the talk about the fragile nature of basketball in Toronto will be put to rest forever.
In conclusion today, I would like to share with you this quote from the "Soul of the Game" by Peewee Kirkland that captures the simple beauty and profound impact basketball can have on future generations.
"The legacy of the playground where heart, hustle and pride make the day.
For some it's a place of refuge. For others a place of challenge. For all, a place of hope.
To the sports world, basketball is a multi-million dollar business.
To the kid in the street, it means a lot more It's his or her destiny.
It's his or her reputation and, in some cases, the final determination of his or her future."
Just like those kids, we believe basketball has a very positive future in Toronto and who knows... 10, 20, 30 years from now, we think it could be Toronto's sport of the 21st century.
Thank you very much.
The appreciation of the meeting was expressed by David Edmison, Director, Martin Lucas & Seagram and a Past President, The Empire Club of Canada.