Dream Job

My Wild Ride on the Corporate Side with the Leafs, the Raptors and TFC

Richard Peddie

• Publisher: HarperCollins Publishers
• Year: 2014
• Print ISBN: 9781443418775
• eBook ISBN: 9781443418782
• Topic: Business
• Subtopic: Business General
• Index: Business

The former head of one of the most successful franchises in the world takes readers into the boardrooms and dressing rooms of major league sports.

Millions of sports fans think they know how to run the home team better than the executive in charge of the operation. Such pressure is bound to teach a person a thing or two about leadership, humility and success. Richard Peddie, former president and CEO of Maple Leaf Sports and Entertainment (MLSE), has clearly learned a few lessons during his years in the business, and now he shares them for the first time.

Dream Job takes readers behind the scenes at MLSE and into the world of Richard Peddie, the man Forbes magazine once called both "a bum," based on the Leafs' lacklustre performance, but also "a wizard" on the business side of professional sport. Entrepreneurs will be keen to learn how a working-class kid from Windsor who barely made it into university managed to reach the top of virtually every organization that ever hired him.

Along the way, Peddie tells stories from his inside vantage point: why the popcorn at Maple Leaf Gardens was always stale, the strange things that rock stars insisted on having backstage at the SkyDome, what it's like to be on the receiving end of death threats from a disgruntled fan, who were some of the quirkiest characters to have worn the Toronto Raptors uniform, and what happened the day it rained seat cushions at the Toronto Football Club's first home game. And, of course, he broaches the tricky business of hiring general managers and the awful business of firing them.

Hockey, basketball and soccer fans and anyone who aspires to lead will all take something away from this fascinating, insightful and hard-hitting book.

Chapter 9

Leafs Nation

When it came time to move season seat holders from their cherished old spots at Maple Leaf Gardens to their brand-new seats at the Air Canada Centre, we did so very, very carefully. We consulted old ledgers (wrested, no doubt, from some dusty vault in the bowels of the old rink) in which the earliest entries—dating back to 1931 when the Gardens opened—had been written by hand with a pen that had clearly been dipped in an inkwell. The alphabetical lists of names were gathered in yellowing, brittle binders, their edges curled. For each subscriber there was a name, a seat number, an address and a phone number. In the 1931–1932 ledger, I noted two telephone numbers: GL 3726 and WA 3344. The thing looked like something that Charles Dickens or one of his characters might have penned. What was remarkable about the book was the neatness of the script, how the names were so familiar (iconic Toronto names such as Ryerson, Simpson, Eaton that also became the familiar names of schools and stores, streets and parks) and the list of complimentary tickets that went to former Leaf players, including King Clancy, Red Horner, Syl Apps—and the chief of police. The Thomson family held fifteen pairs of tickets in the 1931–1932 season, when subscribers paid between $0.50 and $2 per game. Individual seats that season sold for between $0.95 and $2.95, and programs went for $0.15.

Some of the men and women listed in the ledgers had held these seats for many decades: they had come to befriend their neighbours in the stands, and they knew the names of the blue-uniformed ushers and usherettes in white gloves who worked their areas. Some 40 per cent of these fans had held the seats at least since 1970, and some 20 per cent had held the same seats since 1950 or earlier. The seats had been passed on from generation to generation, much like an heirloom set of dishes or a dining room set. They were precious.

When it came time to move the patrons, we had to explain to them the new seating arrangements—how, for example, grey (platinum, actually) was the new gold. Portables were set up outside the Air Canada Centre, then under construction, where we displayed drawings illustrating where their new seats would be, with that process starting in August 1998. Later, when the bowl was being formed and the seats had been installed, we took them into the building and had them sit in their new seats. It was like a form of feng shui. Did the vibes feel good in that seat? Would somewhere else be preferable? People who had held their tickets the longest got priority, and sometimes they swapped an old seat location for a different one.

The late Ken Thomson—a media magnate and art collector, and said to be the richest man in Canada at the time of his death in 2006—was one such patron. I knew him a little, and I knew from Steve Stavro that Ken had been very kind to Steve, who wanted to repay the favour.

“Help Ken Thomson pick out his seats,” Steve said to me. “Centre ice. On the aisle.”

So I helped Ken pick out two seats. But forty-eight hours later he came back, for he had decided to go up from platinum seats to gold. I found that interesting: he could certainly afford to sit anywhere, but by moving up one row he spared himself a club fee and a seat licence—while losing almost nothing in terms of vantage. Ken lived in Rosedale, about five kilometres from the Air Canada Centre. In my running days, I sometimes saw him walking his daughter’s dog. He was a nice man and very sophisticated, as sophisticated a man as Steve Stavro was an Everyman. Yet they were friends. What brought them together, in part, was the Leafs. They were both members of Leaf Nation.

The rake (the angle from the bottom row of seats to the top row) is the same at the Air Canada Centre as it was at Maple Leaf Gardens, as is the set-up of the escalators. Even the Hot Stove Club, which dates from 1963, was re-established at the ACC.

I’m proud of the Air Canada Centre—proud that my name is on the cornerstone, proud of its design and location. I once timed it: you can get from the subway platform at Union Station and into a seat at the ACC in as little as ninety seconds. I’m proud that we took a dated, single-sport enterprise (the Leafs), an organization that was seriously outdated, and built a sports franchise empire that is recognized as one of the best run in the world. (Our record on the ice and court is admittedly less successful, and I’ll come to that.)

Claude Lamoureux, formerly president and CEO of the Ontario Teachers’ Pension Plan (once a major shareholder in Maple Leaf Sports and Entertainment), is a highly respected and admired businessman, and he often told me that our business plans were as good as any he had ever seen. Some 50 per cent of NHL hockey teams do not create formal, annual business plans, and none do strategic plans. That baffles me. At MLSE, we created annual business plans as well as strategic plans, and the latter changed every few years as something new and bold was introduced. When Maple Leaf Square was unveiled, reps from every Canadian NHL hockey team, as well as from sports teams from New York, Boston, Chicago and Phoenix, came to see what we were doing.

All that planning made a difference, one you could literally taste. At Maple Leaf Gardens, fans were served stale popcorn; at the Air Canada Centre, they can buy sushi and wraps and beer brewed in small batches right on the premises. There are 180 master sommeliers in the world and only three in Canada, including Jennifer Huether, who worked for the Air Canada Centre before leaving in 2012 for Cliff Lede Vineyards in California’s Napa Valley.

The building of the Air Canada Centre meant 3,000 new seats for Leaf games. We had no trouble filling them. During my entire time with the Leafs, I had hundreds and hundreds of fans tell me that they were lifelong fans or that they were the “Leafs’ biggest fan.” Leaf fans are loyal, diehard, true blue. Season seat holders consistently renew every year—at a rate of 99 per cent. Divorces mean good business for lawyers because who gets the Leaf tickets is very much a bone of contention.

The Leafs’ television audiences drive the CBC, with audiences surpassing two million viewers. Even the diminutive Leafs TV, which is restricted to most of Ontario, often draws audiences of more than 500,000—more viewers than many nationally televised NHL games in the United States attract. But what really staggered me, sitting in the stands at Leaf away games, and especially in Canadian cities, was the many jerseys worn on game night, the faces painted under blue wigs and the car horn honking after big wins. In my other life in consumer products, I had great iconic brands, but no one ever dressed up as the Jolly Green Giant or the Pillsbury Doughboy.

For years I didn’t completely understand why Leaf fans were so loyal and so avid. It wasn’t until I read Kelly McParland’s The Lives of Conn Smythe: From the Battlefield to Maple Leaf Gardens that it all came together for me. The fan loyalty I inherited was a combination of things. It was Conn Smythe raising the money and working so hard to keep the team afloat despite serving in two world wars. It was the building of the iconic Maple Leaf Gardens in 1931. (Smythe’s philosophy of “If you can’t beat them in the alley, you can’t beat them on the ice” applied to building the Leaf franchise as well.) It was Foster Hewitt, first on radio and then on TV introducing Leaf games with “Hello Canada and hockey fans in the United States and Newfoundland and to Canadian servicemen overseas.” It was the 48th Highlanders marching out onto the ice to introduce every season—a Leaf custom still followed to this day. It was eighteen Leaf captains, such as Dave Keon, George Armstrong, Wendel Clark and Darryl Sittler. And, of course, it was thirteen Stanley Cups.

Recently, there has been a movement to rename some of the NHL awards because American fans and young Canadian fans can’t relate to awards such as the Conn Smythe trophy, which honours the most valuable player in the Stanley Cup playoffs. This would be a mistake. Conn Smythe being successful with the Leafs helped the NHL be successful. Professional sports needs to recognize and go on recognizing the builders who got the league to where it is: individuals such as Conn Smythe, Georges Vezina, Jack Norris and Bill Masterton.

As the CEO ultimately responsible for the performance of the Leafs between 1996 and 2011, I can assure you that losing caused me the most pain. But what drove me the craziest were the fans and the media saying that the owners and the front office didn’t care if the team won or not. After a while I would answer the question about our will to win with my own question: “Why wouldn’t we want to win?”

Winning is definitely good business, since revenues are always better with winning teams. Winning championships is infinitely better because it sets up dramatic revenue increases for years to come. The Ontario Teachers’ Pension Plan sold its 80 per cent share of MLSE in 2012 for an amount that translated into an enterprise value of almost $2 billion. If, at the time of the sale, MLSE teams had been consistently going into the second round of the playoffs, those additional playoff profits could have justified a sales price that would have been at least $200 million more.

Also, most of those who work for MLSE are big fans of our teams (though not overly so: the last people we wanted to hire were autograph-seekers and stalkers), so we really hate losing. I always said that employees had it doubly bad when we lost. Just like fans, we suffered emotionally. And as business people, we suffered from the negative fan and media reaction, and the way losses hurt our business results. Some journalists have argued that MLSE teams lose because they don’t have to win. The thinking goes like this: Leafs have so many people on the waiting list for season tickets that they don’t take new names anymore (absolutely not true), and that no matter what happens, we have a 99 per cent renewal rate. That is true, but players, coaches and general managers don’t even think about renewal rates. So the argument holds no water.

After working in consumer products for nineteen years and in sports for twenty-two years, I am convinced that running a business is a lot easier than running a sports team. Business is not easy by any means, but you can control things a lot better. At Pillsbury, for instance, we created a crescent roll that tasted the same every time. With sports teams, the product on the playing field changes game to game and even period to period.

Unlike Kraft jam off the assembly line, the product’s quality cannot be guaranteed. You also can’t control your employees as easily. Admittedly, businesses have union and employee issues, but if you lead well, they are quite rationally dealt with. Not so professional athletes. These men have been told they are the best probably since they were nine years old or even earlier. Their average salary is usually the highest in the company. To the delight of the media, they speak their minds a lot more often and a lot more publicly than any employee.

When I was enduring the high-profile hiring, firing and trading of players, coaches and GMs, I recalled my time in consumer products and my letting go of or bringing in new vice-presidents, and remember thinking, No one cared. Also, in business there can be multiple winners in any one year. When I was running Pillsbury and having a good year, for example, the teams over at Campbell Soup and Nestlé were likewise enjoying success. Not in sports. In sports, to quote Brian Burke, “There is only one parade.”

It’s tough to win a championship. In sports, winning it all is definitely not the norm. The Detroit Red Wings have been a dominant team, with twelve straight seasons of 100-plus points and twenty-one straight seasons in the playoffs. But in the past fourteen years, all those incredible teams have won only two Stanley Cups, and I say “only” enviously.

My early Leaf years were easy. I was busy working on dragging the organization that time forgot into the twenty-first century. The Air Canada Centre was built, all the suites were sold and season seat holders had been with professionalism and courtesy moved down from Maple Leaf Gardens into their new seats. The Vancouver Canucks had difficulties when they moved their fans into the new GM Place (now called Rogers Arena), but we managed to avoid riling ours.

In those days, I was focusing a lot on the Raptors. As for the Leafs, Ken Dryden and Pat Quinn were having real success on the ice. I’ve heard some fans say that the Leafs haven’t played well since 1967. But from 1999 to 2004, they played as well as or better than almost all NHL teams. From 1999 to 2004, they made the playoffs for six straight years, with two Eastern Conference appearances. In the 1999–2000 and 2001–2002 seasons, the Leafs recorded 100 points, and in 2003–2004, the Leafs set a team record with 103 points.

In four of those playoffs, we matched up against Ottawa. They usually dominated us in the regular season, but we owned them in the playoffs. One year after the Senators lost another series, Senators owner Eugene Melnyk was so angry that he punched a hole in the wall of the visitors’ dressing room. When his then president Roy Mlakar phoned me to apologize, I said not to worry.

“We’ll fix it,” I told him, “and not bill Ottawa. We’ll also keep it quiet.” And I have kept it quiet—until now.

Over the ten years up to 2004, the Leafs averaged 5.5 home playoff games a season, so we regularly budgeted five playoff games in our annual fiscal plan. In fact, in the early days of MLSE, our financial plan counted a lot on playoff games to achieve our operating profits target. This was a very risky practice. Over time and as Maple Leaf Sports and Entertainment grew exponentially, we became much more conservative in our forecasts of playoff games. In my last ten years at MLSE, we hit our earnings targets five times and missed them five times. I like those numbers; they suggest we were in the right spot. If you consistently hit or miss sales targets, something is off.

In one board meeting, a director, Dale Lastman, asked if being conservative with our playoff projections was sending the wrong message to the coaches and players. It was explained that our financial assumptions were confidential and that even if the team did learn about them, financial assumptions were definitely not what motivated them to succeed. I remember one NHL Board of Governors meeting where Gary Bettman showed us the budgets of all thirty teams. Almost all the teams assumed that they would be in the playoffs and indicated as much in their annual financial plans. Many teams assumed going two rounds. One even budgeted being in the Stanley Cup finals. Hope springs eternal. In reality, most teams needed playoff appearances to break even, and they needed profitable financial plans to show their banks.

In 2012, AEG (Anschutz Entertainment Group), which owns the Staples Center in Los Angeles, the Kings of the NHL and a 27 per cent share of the Lakers in the NBA (who share the arena with the Los Angeles Clippers), hit playoff pay dirt. All three teams were in the playoffs, with home games played at the Staples Center. For Phil Anschutz, the owner of two of those teams and the arena, this is heaven. This is what I dreamed of: the Leafs, the Raptors and the TFC team all in the playoffs.

During most of that successful period for the Leafs, Steve Stavro was the majority shareholder and chairman. He was a huge fan. Steve could often be seen standing up in the stands, cheering his “boys” or yelling at the refs. Face red, neck veins bulging, he definitely showed his passion. I did not want to sit beside him during a playoff game because he would often punch me in the arm to show his enthusiasm for a goal or a great play. I remember making it a point of not sitting beside him because my arm was getting too sore. After every playoff loss, no one was more disappointed in the company than Steve Stavro.

Steve had the corner office next to mine. He was the majority shareholder all right, but as CEO I reported to the board of Maple Leaf Sports and Entertainment, not to Steve. He never understood that. He was an uncomplicated man, with a grade nine education. He had a hardscrabble upbringing, yet he had come to own racehorses and a mansion in Teddington Park, a tony part of north Toronto near the Rosedale Golf Club. At first, he wanted me to phone him at 11 a.m. each and every day, and at first I did make the calls. Then I purposely missed one or two calls and eventually weaned Steve off that habit. It wasn’t my job, nor was it productive, to talk to him every day. Then he started showing up at the office each day around 2 p.m. “Bring the boys in,” he would say, meaning the senior management team of Tom Anselmi, Bob Hunter and Ian Clarke. This often meant hauling these guys out of meetings and disrupting their days. After a while, we got him off that habit as well. In the end, he came in only on Wednesday afternoons, and Bob, Ian, Tom, Steve and I would have a great hour-long chat about how things were going.

As I said in Chapter 1, during his tenure we had many fights. On the day of one of our biggest blow-ups, he walked into my office, the anger written on his face. He was beet red, leaning over me at my desk, and the veins on his neck were popping. But I had no fear. I was thinking: I have no debt, I can always get another job, and I have no reason to muster anger to match his. I remained very calm.

“Sit down,” I told Steve. “Sit down or you’re going to have a heart attack.” He did—sit down, that is.

Managing Steve was definitely not easy. As I mentioned earlier, one time he kicked me out of a board meeting because he was angry about something I had done. I had come out the big oak doors, which someone had closed behind me. This time I was the one who was angry, and I threw the three-ring binder I had in my hands. The thing blew apart with the force of my toss and all the pages started drifting down, like leaves in autumn.

I survived that fracas and many others. Steve loved the players and was forever asking that they join him for roast beef and beers. The last thing they wanted was to rub elbows with the suits. Steve also loved Pat Quinn, the rough Irishman. I respected Pat’s knowledge of the game as a player and as a coach—especially of the Olympic team. He had a wonderful career. But I never got close to him. I was the business guy and he was the hockey guy. I got to know Paul Maurice and Ron Wilson, both of whom came after him, a little better.

Steve Stavro was slow to warm to me. I remember one NBA All-Star break in February when the top four executives at MLSE (Ian Clarke, Tom Anselmi, Bob Hunter and I) went to Pebble Beach in California to play golf. Clauses in all our contracts gave us the right to attend the All-Star game of our choice, and we had decided as a group that after the game we would fly down to Pebble Beach and hit the links. I knew Steve would not like us all being away at once for four or five days, even though there were very capable people back at the office. He phoned me in San Francisco and really let me know his displeasure. When we got back, we all had our expense accounts audited. Everything was fine, for we had all paid our own way, but these were the kinds of battles that ensued in my early days with Steve Stavro.

By the end, we all had his loyalty—which was over-the-top. I was recommending salary increases for these three guys of 3 to 5 per cent. “I like him,” Steve would say. “Give him five.”

By the end of his tenure in 2003 (he would die, sadly, three years later), Steve and I had developed a good relationship. He trusted me and liked what the management team was doing.

“You look after the Raptors,” he would say, “and I’ll look after the Leafs.”

When he was bought out of MLSE, he sat me down and said, “Richard, I am now counting on you to look after the Leafs too.”

Although Ken Dryden and Pat Quinn were having success with the Leafs, cracks were starting to surface. And they would come back to haunt the team. For one thing, we had fewer scouts than the average NHL team. We did not have a goalie coach; 70 per cent of teams did. We would often trade first-round draft choices in the spring to pick up older players who mi...

Table of contents

• Epigraph
• Contents
• “A Hundred Thousand People Want My Job . . .”
• “You’re Dead”
• The Early Years
• On a (Crescent) Roll
• Wild Days, SkyDome Days
• Into the Broadcast Biz
• The Raptors Are Coming! The Raptors Are Coming!
• The Football Pitch
• Leafs Nation
• The Two Vs: Vision and Values
• Leadership 101
• On Building a City—One Dream, One Brick at a Time
• Lessons Learned
• Postscript
• Acknowledgments
• About the Author
• Copyright
• About the Publisher