Maple Leaf Sports & Entertainment agreed to a massive deal with Scotiabank to rename what is now the Air Canada Centre. Here’s what the contract means for the Toronto Raptors.
Get ready, the Toronto Raptors are about to have a massive cash influx coming next summer. Yesterday, Maple Leaf Sports & Entertainment – the ownership group of both the Raptors and the NHL’s Toronto Maple Leafs – agreed to a 20-year, $800 million deal with Canadian financial giant Scotiabank. Beginning July 1, 2018, what is now the Air Canada Centre will become Scotiabank Arena.
According to CBC Sports, Scotiabank’s assets total more than $900 billion, and the company recorded impressive growth last quarter. But make no mistake, this isn’t chump change. Scotiabank is pouring money into Ontario’s sports and entertainment industry.
Consider this: Earlier this summer, it was announced that Capital One will pay Monumental Sports & Entertainment $100 million over 10 years for the naming rights of what was once the Verizon Center in Washington, D.C.
The Washington Wizards and Washington Capitals – MSE owns both franchises – will bring in a lot more money. But based on the public numbers, Capital One got a bargain compared to Scotiabank.
We proudly stand together with MLSE, transforming the home of the @MapleLeafs and @Raptors into Scotiabank Arena. https://t.co/4bM1ijHM5i
— Scotiabank (@scotiabank) August 29, 2017
The Raptors should feel thrilled. Given the similarities between MLSE and MSE, a comparison between the two deals is certainly valid. And even though the Raptors reside in a hockey-crazed country, they’ll see a massive windfall. $40 million annually compared to $10 million annually is a heist.
In many ways, this deal validates the Raptors’ progress. The franchise has been around for less than 25 years and cycled through periods of mediocrity and downright awfulness for roughly two decades.
The acquisition of Kyle Lowry, trade of Rudy Gay and emergence of DeMar DeRozan changed everything. The Raptors have won 48 or more games each of the last four seasons, and with most of the core still intact, they look set for another year of relative success.
More importantly for Scotiabank’s purposes, the Raptors have built one of the NBA’s strongest fanbases. In 2012-13, the team filled 91.6 percent of seats for home games. By 2014-15, that number had reached 99.8 percent. Last season, the Raptors cracked the perfect attendance barrier, reaching 100.2 percent.
Scotiabank’s decision isn’t without reason. The Maple Leafs will always be popular, especially now that they have burgeoning superstar Auston Matthews. The Raptors, meanwhile, have just reached peak popularity.
More from Hoops Habit
- 7 Players the Miami Heat might replace Herro with by the trade deadline
- Meet Cooper Flagg: The best American prospect since LeBron James
- Are the Miami Heat laying the groundwork for their next super team?
- Sophomore Jump: 5 second-year NBA players bound to breakout
- NBA Trades: The Lakers bolster their frontcourt in this deal with the Pacers
For those wondering whether this deal will have a tangible on-court impact, the answer is probably yes. As ESPN’s Zach Lowe has noted, MLSE is already flush with cash. But the richer an owner or ownership group gets, the more likely they are to swallow steep luxury taxes and sustain winning.
The Raptors are flirting with taxpayer status this coming season and any added cash will make those payments more palatable. Plus, this deal is 20 years long. In six years, if Norman Powell and OG Anunoby have become All-Stars and the Raptors are perennial contenders, MLSE will be more comfortable keeping the band together since they have this massive annual contract.
If there’s one slight downside to this deal, it’s the length. In all likelihood, inflation and the growth of the sports industry will mean naming rights contracts keep growing. Perhaps $40 million annually becomes an average number by 2038.
Next: Toronto Raptors - Complete 2017 offseason grades
Scotiabank is betting on the value of sports franchises continuing to increase. But the company is also betting – and betting quite a lot – on the Toronto Raptors. And that’s excellent news for the franchise and Canadian basketball as a whole.