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Want a piece of the Maple Leafs?

One Alberta man is hoping to raise money to purchase the Toronto Maple Leafs. Should you buy in?

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Now that Vancouver’s Stanley Cup dreams have been dashed for another year, the off-season wheeling and dealing can begin. Some teams will trade players, others will fire coaches; one Canadian city is in the midst of building a new team. But the biggest deal of all could be the sale of the Toronto Maple Leafs.

No, Rogers hasn’t made an offer to buy Maple Leafs Sports and Entertainment. Neither has Bell. No company, in fact, has made a bid for MLSE. Who wants to buy the Leafs (MLSE, a private company, also owns the  Raptors, the Toronto Marlies and the Toronto FC) then? An Albertan and 1 million Torontonians.

Darren Thompson, a Leduc, Alta.-based businessman, created the website ownthemapleleafs.com where he’s asking a million people to donate $1,000 to buy the Ontario Teacher’s Pension Plan’s 66% stake in MLSE. He admitted to the Toronto Star that it’s a “crazy dream”, but he’s trying anyway.

“It’s always been a dream of mine to own a professional sports team, and being a good Canadian, that professional sports team should be a hockey team,” Thompson told the Star. “I believe there’s enough people out there to truly and honestly do this.”

Whether there is enough support for this or not, his plan to raise money, put it in some sort of fund and then spend $1 billion to buy MLSE has, to put it politely, a few holes. His FAQ page, which, two days ago, was replaced with page saying he still has “some I’s to dot and t’s to cross” before he can collect money, has almost no details as to where the money will go. Here are two questions from a cached version of the site:

3) Who can invest?

As far as we are concerned, anyone from around the world with a dream to own the Leafs can invest. As for the actual legal stuff, we will let you know.

4) Is it RRSP eligible? Do I get a dividend?

We are not financial people but we are now talking to the right people to guide us through this. This is our intention. If the company makes money, you make money.

“You can’t collect $1,000 from a million people without giving them the details,” says Barry Schwartz, vice-president at Toronto-based Baskin Financial Services. “You need legal documents and a prospectus entailing the risks.” He also needs to tell people how much he’s planning to take for himself and what bank he’ll use to deposit the money.

Besides issuing a prospectus, and filling out the financial details, to make this work Schwartz says Thompson will need to take over a TSX listed shell company so he can sell shares to the public in $1,000 increments.

He also has to figure out what the Teachers stake is really worth. Schwartz says that recent media and sports transactions have been going for 10 or 11 times enterprise value divided by earnings before interest, taxes and amortization (EBITA). “That’s the multiple companies would use to value a sports product,” he says.

Even if Thompson were able to do everything by the book, and start collecting investments, there’s no guarantee that MLSE’s other majority shareholder – Toronto businessman Larry Tanenbaum – would entertain an offer from a million Canadians.

“I don’t think he’d want another public or private company with a million people in there,” says Schwartz. “That’s a very confusing situation.”

Thompson’s plan, says Schwartz, is “ridiculous.” But wannabe Leaf owners can still own a major NHL franchise. Schwartz suggests buying Rogers (TSX: RCI.B), BCE (TSX: BCE) or Telus (TSX: T), MLSE’s “logical buyers.” With streaming video sites like Netflix eating into the telecom’s market share, live sports may be these companies’ only hope to capture a rapt audience.

“We’ve seen Rogers acquire Citytv and Bell buy CTV,” says Schwartz. “At some point we’ll see MLSE open for a bid.” He adds that telecoms pay dividends, so at least investors will get income while they wait for someone to make an offer. If people want to own an NHL team now, consider buying Madison Square Garden Inc. (NASDAQ: MSG), the company that owns the New York Rangers (and the New York Knicks).

For some people, simply owning a sports company stock and receiving a dividend won’t be enough to make them feel like a business mogul. No problem – there are other ways to prove that you own a hockey team. “Ask the company for a stock certificate,” says Schwartz. “Then staple it to your wall.”