Toronto FC’s ‘Bloody Big Deal’

Though certainly not breaking news anymore, Business of Soccer would be remiss if we did not touch on this monumental development in Major League Soccer.

Toronto FC have stolen the transfer headlines from European clubs currently in the January transfer window with their acquisitions of Michael Bradley from AS Roma and Jermain Defoe from Tottenham Hotspur.

By major European club standards the money splashed by Toronto FC on these players is in no way massive.  The total transfer expenditure comes to around $20 million for the two, which for a medium to large European club could constitute a standard transfer window outlay.  For MLS clubs and specifically an underachieving club like Toronto FC however, this outlay is pretty massive.

As previously stated, the fees for both players are believed to total around $20 million.  AS Roma officially released the fee, $10 million, but Tottenham did not do the same, though it is estimated to be around the same as Bradley’s.  To put this in perspective, each deal individually breaks the previous transfer record by $1 million, set by Clint Dempsey when he moved to Seattle.  If you include total base salary paid to these players over the course of their contracts the outlay from Toronto reaches the $100 million level.

$100 million is A LOT more money than $20 million and brings a whole new light onto how massive this deal is for MLS, Toronto FC and Maple Leaf Sports & Entertainment.

Tim Leiweke, current President and CEO of Maple Leaf Sports & Entertainment, even admitted that signing three Designated Players is “financial suicide” during the unveiling of the players in Toronto at Real Sports Bar and Grill, though he insists that the outlay of money will pay dividends.  Brazilian forward Gilberto, signed from Internacional of Porto Alegre, represents the third DP signing in this MLS offseason for Toronto.

The league only allows for three DP contracts on the books, which leaves Matias Laba in an awkward situation being a fourth DP signing from the previous year which the club has vowed to work out.  They have until March to submit their final roster which gives the club some time to work out the details.

The money isn’t the only aspect to these deals though.  While numerous transfers between clubs don’t necessarily build a club-to-club relationship, there are many examples of clubs using deals like this to seize the opportunity to build a little more business for both teams and boost the benefit of the deal.

Toronto FC has made this kind of deal with both Tottenham and Roma and they have done so in mutual benefit.  The deal with Tottenham is certainly the more detailed of the two creating a 4-year advertising agreement between the clubs.  The deal will see Tottenham provided “promotional and branding opportunities, experiential activities and advertising, broadcasting, social media and digital rights” across all of MLSE’s properties and media platforms according to mlssoccer.com.  Those properties include the NBA’s Toronto Raptors as well as the NHL team the Toronto Maple Leafs.

Beyond this,Tottenham Hotspur FC official merchandise will be stocked at Toronto’s retail outlets, and support will be given to the THFC Official Canadian Supporter’s Club.

File:Toronto FC Anthems BMO.jpg

BMO Field : Photo courtesy of Wikipedia user upload

Additionally, and this is where Roma’s and Tottenham’s deals overlap slightly, Toronto agrees to play an exhibition match against Tottenham during their North American pre-season tour this summer that will include visits to Chicago and Seattle as well.  Roma also has an exhibition match set up with Toronto though the details of when are yet to be released.

More importantly for Roma, the clubs now have a partnership at the youth level.  Toronto will be able to send youth players across to Italy to train with Roma and vice-versa for Roma youth talent.

One final caveat to the deal on Tottenham’s end is the use of Jermain Defoe. The beginning of the MLS regular season does not exactly line up with the end of the Premier League season, but there is somewhat of an overlap until around March and Toronto have agreed to allow Defoe to stay with Tottenham until then before moving to Toronto.  Roma on the other hand have fully released Bradley at the time of the sale.

With the signings of Defoe and Gilberto, as well as bringing back hometown hero Dwayne DeRosario, Toronto’s attacking impetus looks to be quite threatening, especially with Bradley patrolling the midfield and if they manage to hold on to Laba at the back they could very well look to break their playoff duck that has hung over their head since joining MLS.

Overall, the financial outlay and different partnership agreements point toward a massive amount of work and money that has gone into making these deals happen, not to mention the risk should these moves prove to be less effective than expected.  Though much like the LA Galaxy when Beckham signed, whether or not sporting success comes, commercial success seemed to be immediate with Toronto, who have apparently already sold 92% of available season tickets.

It remains to be seen if this project will win, but rest assured the spotlight will be on Toronto FC this coming season.

 

What do you think about Toronto FC’s recent signings? Let us know in the comments section below or via Facebook or Twitter.

Reporting on the business side of the world's game.