maple leafs and sports entertainment

8/19/2019 Maple Leafs and Sports Entertainment

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Maple Leaf Sports andEntertainment

How two Canadian Juggernauts took overCanada’s most valuable pastime

Joshua En, Divleen ang, Sara ang, atia r!vd!k, "idan M#$ride


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"genda

• %verview and $a#kground of Case• Strategi# &nnovation and 'esponsiveness• &mitation and &solating Strategies• Cost vs Di(erentiation Strategies• )orter’s )ositioning and Superior *alue

"dvantage• +pdate to Case• e! akeawa!s


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%b-e#tives

• +nderstand the #on#ept of media #onvergen#eand its impli#ations on #ontent deliver!

• +nderstanding &nternal vs E.ternal fa#torsa(e#ting #ompetitive advantage

•

+nderstand rivalr! through imitation andinnovation• +nderstand Cost and Di(erentiation

"dvantages through the *alue Chain


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Ma-or Canadian $road#asters


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4h! did these two 5er#el!#ompetitive #ompanies team up

to pur#hase MLSE6


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MLSE imeline

3783

• 9ounded b! Conn Sm!the as publi# #ompan! Maple Leaf:ardens Limited to manage the oronto Maple Leafs

37;2’s

• Moved be!ond ho#ke! to diversif! in multiple sports

377<• MLSE as we know it toda! formed with the a#/uisition of

the oronto 'aptors

122=• Laun#hed the oronto 9C Ma-or League So##er e.pansion

team


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Maple Leaf Sports > Entertainment

MLSE oronto

MapleLeafs

oronto'aptors

orontoMarlies

oronto9C

So##er

"irCanada

Centre

ia rainin:round

'i#ohColiseum

MasterCard Centre

?3@= $illion


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Maple Leaf Sports > Entertainment%wners

$efore "fterLarr! anenbaum A12B

%ntario ea#her’s)ension)lan A


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3


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3712s

• ed 'ogers Sr@ started the C9'$ radio station in oronto

37 ;• ed 'oger Jr@ entered the #able * market

37


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Convergen#e

*erti#al &ntegration

Content)rodu#ers

• Studio• Sports• )reFre#orded

Content)rogrammers

• *0etworks

• Channels

ContentDistributers

• CableCompanies

• &nternet)roviders


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"ttra#tiveness of Sports

•

:iven their nature, people willnot skip ads as the! want towat#h the event through frombeginning to end

• herefore the ad revenue ismore stable than other potential#ontent


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Convergen#e vs De#lining *revenue@ 4hi#h one is more

important to $ell and 'ogers6


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%ur take on Convergen#e vs "d'evenue De#line

•

E.ternal pressures inform internal strateg!• Convergen#e doesn’t matter if there’s no

one wat#hing, then no one is pa!ing• &n the long term, $ell and 'ogers need to

adapt to the new te#hnologi#al future and5nd new sour#es of revenue


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Strategi# &nnovation Dimensions

Strategi#&nnovation

0ew&ndustries

0ewCustomerSegments

0ew SouoCompe"dvant


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'oberto’s 0ew :ame StrategiesIadopting aninnovativeapproa#h to business andrewriting theof the game their own strand upset the#ompetitive in the industA$uaron, '@

S # o p e o f C o m p e t i t i o n

A 4 h e r e

M o d e o f

C o m p e t i

t i o n

A H o w

E.hibit 3 he Strategi#:ameboard


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Can the a#/uisition ofinterests in MLSE b! $ell and

'ogers be des#ribed asstrategi# innovation6


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I%rganiKational responsiveness was positivel!related to the 5rm’s #ompetitive advantage@

hese results showed the importan#e ofdeveloping a e.ible infrastru#ture that #an be/ui#kl! adapted and re#on5gured to meetdemands in d!nami# environments A$hatt,Emdad, 'oberts, > :rover, 1232

Responsiveness

"nti#ipatinge.ternal #hanges

Speed ofresponse


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E.plain how 'ogers and $ella#hieve this #ompetitive

advantage usingresponsiveness to #hange@

ur ta e ow ogers an e


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ur ta e ow ogers an ea#hieved this #ompetitive

advantage using responsiveness to

#hange@• $eing agile and /ui#k@ 9ound the time when previousowners were looking to get rid of it@ &t is a rapidl!evolving industr! and it is important to re#ogniKe anopportunit! for #hange, even if that means

pur#hasing with !our rival@• 9irst mover advantage e.ists as there has not been

an a#/uisition this big before@ 'ogers and $ell wereable to sta! ahead within the sports broad#astingindustr!@ 0either one wanted the other to pur#hase

MLSE #ompletel!@


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'ivalr! Challenge

'ival e#hni/ues

&mitation

&nnovation

H i th #h f MLSE i l ti


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How is the pur#hase of MLSE an isolatingme#hanism for $ell and 'ogers6

Figure 4.2 Sustaining #ompetitive advantage t!pes of


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%ur take on the &solating Me#hanisms

•

Deterren#e through preFemptionIo##up!ing e.isting and potential strategi#ni#hes to redu#e the range of investmentopportunities open to the #hallenger

A:rant, Jordan > 4alsh, 123=• 'esour#es and Capabilities A5rstFmoveradvantage Controlling rare and uni/ueresour#es


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*alue Chain


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Cost "dvantage vs Di(erentiationCost Leadership Diferentiation

e! Strateg!Elements

• S#aleFeN#ient plants•

Design for manufa#ture• Control of overheads and

'>D• )ro#ess innovation• %utsour#ing• "voidan#e of marginal

#ustomer a##ounts

• $randing•

"dvertising• Design• Servi#e• Oualit!• 0ew )rodu#t

Development

'esour#eP%rganiKation

al'e/uirement

s

• "##ess to #apital• )ro#ess engineering skills• 9re/uent reports• ight #ost #ontrol• Spe#ialiKation of -obs and

fun#tions• &n#entives linked to

/uantitative performan#e

• Marketing "bilities• )rodu#t engineering• CrossFfun#tional

#oordination• Creativit!• 'esear#h #apabilit!• &n#entives linked t

/ualitative performa


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Di(erentiation *alue Chain

3@ Constru#t value #hain for the 5rm "0D the#ustomer1@ &dentif! drivers of uni/ueness in ea#h

a#tivit!8@ Sele#t the most promising di(erentiation

variables for the 5rmQ@ Lo#ate linkages between the value #hain

of the 5rm and that of the bu!er


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4hat #ompetitiveadvantage e.ists for 'ogersand $ell in e.panding into

the media industr!6

%ur take on the #ompetitive advantage


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%ur take on the #ompetitive advantagethat e.ists for 'ogers and $ell in

e.panding into the media industr!6• $! #reating di(erentiation through

#onvergen#e the! #reate value for the#ustomer@

• $ell and 'ogers both are able to #ontrol thevalue #hain from produ#tion to distribution@

• he #ompetitive advantage is that#ustomers onl! need one servi#e providerand subs#ription to a##ess sports #asting@


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"#tivit!

8@ Sele#t the most promising di(erentiation variables for the5rmQ@ Lo#ate linkages between the value #hain of the 5rm and thatof the #onsumers

Content)rodu#ers

• Studio• Sports• )reF

re#orded

Content)rogrammers

• *0etworks

• Channels

ContentDistributers

• CableCompanies

• &nternet)roviders

CC


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Step 8

•

he most promising di(erentiationsvariable is that the! now #ontrol #ontentprodu#tion to #ontent #onsumption b!MLSE@

•

Sin#e the! are ma-orit! shareholders ofMLSE as a uni/ue resour#e and it is not aimitable produ#t, this resour#e #an besustained /uite easil!@


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Step Q

•

Customer’s obtain value be#ause the! needonl! look to one servi#e provider to wat#hsports#asting events with these teams@

• $! providing greater #onvenien#e for the

#ustomer, $ell and 'ogers able to fa#ilitatepurposeful di(erentiation@


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)orter )ositioning

Figure 4.6 )orter’s generi# strategies

Single Segment

&ndustr! 4ide

C%M)E & &*ESC%)E

S%+'CE %9 C%M)E & &*E "D*"0 ":ELow #ost Di(erentiation


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Superior *alue "dvantage

4hen a 5rm emplo!s both low #ost and di(erentiationstrategies to #reate a h!brid model, without being stu#kin the middle@ he! have reconciled efectivediferentiation with low cost , as opposed to beingstu#k between two #ompeting strategies@


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+pdate to Case• :u! Lauren#e appointed as the new CE% in

De#ember 1238@• IClear fo#us on #ustomers, growth and

espe#iall! pushing #ontent a#ross allplatforms

• "#/uired rights to 0HL Canadabroad#asting for =@18 $illion in 0ovember1238

• Ma! 123= Sportsnet surpassed S0 as the #ountr!’s

top sports brand for the 5rst time ever over the past


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+pdate to Case

•

Ma! 12, 123= $ell and anenbaum bu! theC9L team oronto "rgonauts@• 'ogers absent from the deal• 'ogers informed "rgos the! had to leave

'ogers Centre after 123;@ )lanning on movingto $M% 5eld A%wned b! MLSE @• %wns 3


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+pdate to Case• Mi#hael 9riisdahl appointed )resident and CE% of MLSE,

beginning in De#ember 123=@

I4e have oronto 9C in the pla!o(s, 'aptors 72=tipping o( ne.t month, 0$" "llFStar and the 4orld Cupof Ho#ke! at "ir Canada Centre in 123 , :re! Cup 123

at $M% 9ield and the 322th anniversar! of the MapleLeafs in 123;@ hese are e.#iting times for oronto,indeed for all Canadian sports fans, and &’m ver! proudto be leading the MLSE team that will deliver for them@


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Having gone into thispartnership, do !ou think that

$ell and 'ogers #an #ontinue tosustain their separate

advantages against ea#h other6


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akeawa!s• $! being able to reFwrite the rules A#ompetitors to

partners and fo#using on a narrow market segment,$ell and 'ogers were able to #reate strategi# innovationfor themselves@

• $! re#ogniKing the need to sustain a #ompetitiveadvantage, $ell and 'ogers signed the a#/uisition/ui#kl!, in order to respond to the possibilit! of e.ternal#hanges su#h as losing * viewers@

• $ell and 'ogers gained a di(erentiation advantagethrough #onvergen#e b! #ontrolling all the variablesfrom produ#tion through to distribution of sports #ontent

to their #onsumers@


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Ouestions6

maple leafs and sports entertainment

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