Geopolitics meets Major League Baseball

Frank McKenna:
Russia's losing the war, and if there's an inflection point, it'll be that Russia is going to try to figure out some face-saving way to stop it.
Peter Haynes:
Welcome to episode 78 of Geopolitics, a monthly TD Securities podcast. My name is Peter Haynes and I'm the host of the podcast where I speak to my colleague, the Honorable Frank McKenna, about global geopolitical issues.
Frank, I must admit, I've been looking forward to this episode more than any that we've done in the past, as we are taping live at the Rogers Centre ahead of the Jays-Marlins game tonight. And we will be joined by former president of the Toronto Blue Jays, Paul Beeston in the second half of this podcast to discuss baseball. So it's talking geopolitics, followed by talking baseball, and then the baseball game. Are you as pumped up as I am?
Frank McKenna:
Am I ever? It's a free game. I don't get many of those.
Peter Haynes:
Yeah, that's very true. Thank you, TD.
Frank McKenna:
And food, hopefully. So I'm really pumped up.
Peter Haynes:
Yeah, me too. Me too. Popcorn. Okay. So Frank, the plan today is for me to ask you a few questions about geopolitics, and then we'll open up to the audience here. I'm sure there'll be some people who have some landmines for you or some grenades to send your way. And then we'll invite Paul on the stage, and we can grill him on all things baseball.
But just before we get started, Frank, I want to thank you personally for making time for us today. I know you're flying to the East Coast at 4:00 in the morning from Hamilton tomorrow morning to attend Robert Irving's funeral. I know the Irving family means a lot to you, having known them well from your time in New Brunswick. Can you tell us a little bit about the legacy of Robert Irving?
Frank McKenna:
Well, Robert and his brother, Jim Irving were the co-CEOs of JD Irving Company, and that family have, in total, probably 200 companies. That includes everything from the shipbuilding business. They're building all of the Canadian destroyers and icebreakers, and they've got a tug business. And they run Sunbury Transport and Midland Transport, Majesta tissue, and Cavendish French fries and J.D. Irving Company, which are the biggest in all of Canada.
And then they've got pulp and paper mills, and they've got potato plants all across North America, and tissue plants all across North America. Massive philanthropists in our region. And for sports fans, Robert was the owner of the Moncton Wildcats, and he didn't mail it in. He was at every game and cheering behind the bench, and a very enthusiastic booster, and the leading philanthropist. Every cause, he would start with a big check and then make the calls personally. Yeah, so we're missing a real giant.
Peter Haynes:
We were walking over together and you said it was pretty quick, and he was diagnosed with brain cancer, I believe 10 months ago, and it happened fast as well.
Frank McKenna:
Yeah, it's one of the cancers that doesn't have a very good prognosis. On the good news side, I was just today reading something about pancreatic cancer and how a couple of therapies have dropped down all of a sudden, which are doubling the survival rates for pancreatic cancer.
And I was talking actually to one of the Irvings, because they made a major gift in Massachusetts at Harvard, and the doctor who spoke to them, in this room, he said, "A number of you are going to get cancer." He said, "But none of you are going to die from it. Not anymore."
He said, "Within two or three years, we're going to have cancer beaten." So, whether the time is right or not, I think we're headed with the right direction, and maybe one of those applications of AI that turns out to be a net positive for humanity.
Peter Haynes:
Turning to geopolitics, Frank, I want to start with news this weekend that the United States and Iran are apparently in agreement on a plan to end the war. From what you have read or heard, how is this agreement better or worse than Obama's Joint Comprehensive Plan of Action signed in 2015 to prevent Iran from developing a nuclear weapon?
Frank McKenna:
Yeah, obviously we're going to have to wait until the details come out, but it would be a good thing for the world to have that war, and in fact, to have all wars end. But this war in particular is tying up 20% of the world's oil traffic, prices are beyond $100 a barrel.
It doesn't impact us as much in Canada, even though gasoline prices are up, but we are a major producer, probably the third-biggest exporter of oil in the world. But there are a place around the world where oil and gas are being rationed, where people are making decisions not to travel or not to cook, or not to do lots of things because they can't afford it. And it's not just oil. This affects things like the fertilizer, which comes through the Strait of Hormuz, and that affects crops and crop prices. So, it's a terrible situation.
I would say that this deal after months of war and killing, and damage to the world economy, probably costing the United States, just in the military applications alone, 30 to $50 billion, will probably take us back to where Obama had us in 2015.
So he did a deal in 2015, effectively, where Iran agreed to not enrich uranium beyond 3.67%, and to get rid of their stockpile of uranium, and basically allowed the IEA in to constantly monitor that. And if there was any slippage, they had what's called a snapback, which means you could go back to the sanction program and everything else.
And it was working, quite frankly. The IEA and the international community, all of the Europeans who had signed the deal would say that, "On this, Iran had not been cheating." Now, they continued to fund militias that were causing mischief, noted about that, and continued to do all kinds of other things, but they were not cheating on that.
So, this deal will, at its center, do something around nuclear enrichment, because Trump tore that up in his first administration, that 2015 agreement, he tore up in 2018. And after he tore it up, Iran did nothing for a year. They stayed exactly where they were, wondering whether or not the Europeans would continue to respect the agreement or not.
After a while, they got tired of waiting and they started enriching again. So they're up over 60% enrichment, basically because Trump tore up the agreement, which had prevented them from doing that.
So, under this new agreement, there will have to be some rollback of the enrichment program, a dramatic rollback, and it looks as if Russia is prepared to act as a third party to take the stockpile of enriched uranium. This is very similar to the terms in 2015. The only difference is, since then, we've gone through a war that's cost billions of dollars, cost thousands of lives.
The other major areas that will be instructive will be opening the Strait of Hormuz, 'cause 20% of the world's oil is going through the Strait of Hormuz, a lot of other shipping going through it. So, Trump will be able to get the Strait of Hormuz open, but guess what? It was open before the war.
So, all he's achieved is to reopen a strait which he had closed through the war, which was started several months ago. So, I can't really call that a big win, but it is a necessary result of the negotiation.
There are several things that would have been achieved. There was a significant attrition of Iranian military capabilities, but they haven't disappeared. In fact, research has shown that something like 21 out of 23 of their artillery batteries that were destroyed had been replaced. They're back in business.
And we have to remember that the Iranians are not stupid people. They're 93 million of them. They're very, very clever, amongst the most educated people in the world, equally divided between men and women. They've got the fifth most STEM graduates in the entire world. A third of the world's engineers are graduating from Iranian universities. So this is a very clever country and a very resilient country.
So, the United States would have achieved some attrition of their military might. They definitely achieved attrition of their militias, Hezbollah, the Houthis and Hamas, but that wasn't really a threat to the United States. That was more a threat to Israel, but they have definitely attrited those capabilities. We will not see regime change, which was one of the original reasons for having the war.
So I would say overall, it's a mixed bag. The President, quite appropriately for a politician, will declare victory and get out, but the Iranians will declare, "We were able to take the best that was thrown at us and survive, and so we won."
So, I would say we walk away with both parties claiming some form of victory. My own view is it's a pyrrhic victory. It's a huge price to pay for not a great deal of forward progress.
Peter Haynes:
And does every ship that goes through the Strait of Hormuz have to pay a toll to Iran now?
Frank McKenna:
No, I would say that that will not be allowed. Oman and Iran have put a proposal up to do that. I would be very surprised. If that were to happen, the next thing you know, you would end up having every waterway or choke point in the world with a toll booth on it. So no, I think we'll be successful, because it wasn't any tolling before this war. So, I think it'll be a case of the status quo ante.
Peter Haynes:
Okay. So let's move over to the other war, the one in Ukraine. World leaders condemned the attack by Russia on Ukraine's capital, Kyiv, on Sunday, where Russia used its mid-range supersonic ballistic missiles for, I believe, the third time to attack several different infrastructure sites, and that resulted in several civilian casualties.
Up until this weekend, momentum had been favoring the Ukrainians in this war, and it appears that Putin may be losing support of Russians as the casualties pile up. I understand today Lavrov told Rubio that they should get all of their Americans out of Kyiv, indicating obviously they're going to continue the strikes. What do you make of the status of this war? And do you think we might be approaching an inflection point?
Frank McKenna:
Russia's losing the war. And if there's an inflection point, it'll be that Russia is going to try to figure out some face-saving way to stop it, because what's happening now is not in their favor. They've been at this war for four years. They've lost over a million men. The losses here are stunning. Over 35,000 Russian soldiers killed a month, basically cannon fodder, like we saw back in Stalingrad in the Second World War, and they're running out of men. So it's going to be hard to continue to prosecute the war.
Not only that, but the Ukrainians have been able to stall the Russians in their tracks. The Russians got a bigger army by far, far more artillery, far larger country with a lot more might, but they can't move the line that divides the countries, and they move by inches now, and they'll never be able to take over all of Ukraine.
So, Ukrainians have been able to stop them, and they've stopped them by adapting on the battlefield and using technology. Ukraine literally are the masters now of electronic warfare and the use of technology. Every country in the world is going to be going to Ukraine to figure out how to fight the next battles.
In fact, they've created an industry in the Middle East now, providing them with technology, electronic warfare measures and drones in order to protect against Iranian missiles coming in. There are 2,000 defense industries that have spawned out of this war in the Ukraine, and they're selling their technology all over the world.
The Ukrainians are now producing over 1,000 drones a day. Last year they produced three million drones. Next year, it's seven million drones, and these drones have increasingly sophisticated capabilities. Used to be they'd fly for a mile.
Now, they're flying for hundreds of miles, carrying heavier packages of explosives, and they have better counterintelligence measures. Some of them have umbilical cords on them so that they're not subject to electronic jamming. They're able to take trucks loaded with soldiers and resupplies as many 50 and 100 miles away from the frontline.
So, all of this to say that Ukraine, they're suffering horribly, like the attack this weekend, but they are fighting hard, and they're holding their own by the use of technology. In the meantime, Russia has got about a quarter of its petroleum knocked out because the Ukrainians are bombing the oil refineries in Russia, and the offloading points and the trains, et cetera.
The price of gasoline is skyrocketing or being rationed in Russia. Inflation is rampant in Russia, they're burning into all of their reserves, and the citizens are increasingly unhappy with Putin. So, I think that he's got more domestic problems than he's had now for the last four years, and I think that he's vulnerable.
If the Americans would ever agree to give advanced missile technology, like Tomahawk missiles to Ukraine, I think the war would be over, 'cause they'd be able to attack Moscow and Leningrad and cities like that, and really bring the war to Russia, or if the Americans would be full-throated in their support.
The only thing that's kept Russia alive right now is the fact the Americans, because of the war they started in Iran, have driven the price of oil so high they had to take the sanctions off Russian oil to get more Russian oil into the market in order to be able to supply the market.
But when those sanctions go back on Russian oil, and when people wake up to the fact that Russia is not doing well in this war, I think there's going to be more pressure for a peace agreement, which will essentially freeze the line somewhere where they are now, and with very robust peacekeeping in between the two lines. Something along those lines is probably the inevitable result of this war.
Peter Haynes:
Do you think that that happens in the year of 2026?
Frank McKenna:
Yeah, I think we're edging towards that. I think so. I think once the Middle East war is over with, that we have a peace with Iran, I think Trump will turn his attention back to the Nobel Peace Prize again. And quite appropriately, I think he'll start pushing these parties to try to bring this to a conclusion. So I hope so.
What happened this weekend is really unconscionable, using a supersonic missile to bomb Kyiv. There can only be one objective in mind. That's to kill as many civilians as you can. And I'm hoping that'll provoke the Americans to allow the Ukrainians access to more sophisticated weaponry.
Peter Haynes:
Let's switch gears to Canada, Frank. A couple of weeks ago, you spoke at the Milken Conference on a panel entitled Global Investors' View: Canada. What is the global investor view of Canada?
Frank McKenna:
Peter, I'm going to sound like Pollyanna here, but I've never seen the mood as positive. And that's in spite of the fact we're facing an existential threat from south of the border, where the United States seems determined to have us in their gun site, and where we have a trade relationship that needs to be renegotiated.
And you have to remember that in a world of chaos, and a world of disharmony, and a world of peril and war, we look pretty good. Within Canada, we'd say, "What a mess. This country's a mess." But the rest of the world looks at us and say, "Man, you guys look pretty good compared to everything else."
So, our civility and legal system, and political stability, are all real positives. And then the fact that we're an energy storehouse. If you use the same equivalency of measurement, we would have the largest oil reserves in the world.
I'm on the board of Canadian Natural Resources. We measure our reserves in 80-year cycles. As long as oil is ever going to be used, we have oil. We've got massive natural gas deposits, and uranium and potash, and all of the rest of them. The world sees that.
We got 20% of the world's fresh water in Canada. Quebec alone is 3% of the world's fresh water. Arable land, we've got all of the things that the world is craving. And then we've got the ability to get those to market at a time when the Strait of Hormuz struck down, the West Coast and the East Coast of Canada represent viable shipping alternatives. So, we've got a lot going for us.
Everywhere I've gone in the world, and I've been around the world a lot, people are raving about the opportunities in Canada. You saw Shell make a monstrous move in Canada, moving about $15 billion into the country, and that's not only a bet on gas in Canada, but it's a bet on them doubling the LNG facility that they built.
There are about four other LNG facilities that are in various stages of commissioning. We have an amber light, if not a green light, to build another pipeline to the coast that would take another million barrels of oil a day. The amount of money produced by these resources is staggering.
Just getting the Trans Mountain pipeline to the West Coast and allowing the Americans to have less leverage over us. They've discounted our oil by 80 to $100 billion over the last 10 years. If we can take that differential away, that's all money that accrues to Canadian coffers, to Canadian citizens, and it's many billions of dollars.
So, we're making progress on that. We're making progress permitting mines, we're making progress... The government is openly opining about the possible privatization of airports and ports. So there's a lot of good stuff going on.
You would've seen OMERS directing, I think it was $8 billion, they're saying, towards Canadian strategies over the next five years. Saw Enbridge put $4 billion up to get gas to the coast. You're just seeing things happening, $100 billion in FDI net into Canada during the last year.
Last week, I read an article saying the international investing community of decree that Canada is the most investible place in the planet right now. So it's just different. It's changed qualitatively in the last year or two.
And quite frankly, without being partisan about it, we have a prime minister now who is the rockstar of the world in terms of being respected in other countries. He's a known and named and respected commodity around the world. I went to the Middle East last fall and we met with sheikhs and heads of sovereign funds, they all know our prime minister. And so all of that helps.
This summit that we're going to have in the fall, it's just getting sold out. I can't tell you how many inquiries I've had about how people can get at it. It's literally a trillion dollar summit.
And the Milken Institute that I was at in LA are so excited about what's going on in Canada. They're moving a Milken Institute meeting to Canada to coincide with that summit. So yeah, Peter, I'm bullish. A lot of good things happening right now.
Peter Haynes:
A couple other things that are happening right now. We've got Carney working the New York Street sometime later this week, speaking to the Economic Club in New York and having investor meetings.
And also, Frank, we have an Indian free trade delegation that's in Toronto, or in Canada, I should say, the Industry Minister Piyush Goyal. Do you know much about what will happen this week while he's in town with Canadians?
Frank McKenna:
Yeah, there's been a whole vein of opportunity opened up. Remember, we're the biggest free traders in the world. We've got 16 free trade agreements with 50 countries, two thirds of the world's GDP. We're the only G7 country that's got free trade agreements with all the other G7.
And over the last few years, we were offside with India and with China and Saudi Arabia. Those relationships have all been restored, and the Prime Minister and the Foreign Affairs Minister Anita Anand, who's a personal friend of Modi, they've been there, they met with Modi.
The relationship is now really gelling strongly, to the point where what's going to happen this week is the opening negotiations on a free trade, a comprehensive free trade deal with India. Very good news.
And they're going to be chased out of Ottawa the next day with the Foreign Affairs Minister from China who's coming to Canada. So, Canada's hot right now. It's a good news story. But in fairness, talk is cheap. We have to execute. And right now, everybody likes the rhetoric, but now we have to get (beep) done.
Peter Haynes:
Let's pivot to a couple of headline stories this week from Canada in the news cycle. First headline entitled, quote, "Trump's Man in Ottawa doesn't understand why Canadians are so frustrated." End of quote.
This article references US Ambassador Pete Hoekstra's recent comments about tariffs being here to stay. Do you think Hoekstra is just negotiating in the court of public opinion about upcoming CUSMA negotiations, or he truly doesn't get why Canadians are upset?
Frank McKenna:
Yeah, I don't think he's reading the room. Look, I don't think Canadians are gratuitously angry. I think they feel betrayed. We didn't start this. We didn't say to the spouse, "You're no good. You've never brought anything to the marriage. We don't want to have anything to do with you."
But when that happens to you, man, it hurts, and that's the way Canadians feel. We feel a relationship we've had for over 100 years, best friends, neighbors, we're almost indistinguishable, and we feel profoundly hurt.
Now we've got to figure out what to do about it, and Canadians voted with their feet. No government said, "Stop traveling to the US." Canadians just stopped or reduced their travel. 34% of US tourism comes from Canada. We're the biggest tourist market in the world, and the Canadians started moving their travel elsewhere, and it's hurting a lot of American communities.
Similarly, in terms of liquor and buying stuff, nobody said, "Don't buy any bourbon from the US." Provincial distributorships stopped carrying it and Canadians stopped buying it. People, individuals, 40 million people just voting with their feet.
I don't know why Hoekstra should be upset about that. He should just recognize that we have feelings and our feelings are hurt. What we would all like is to get back to the relationship we have with our best friend. That's what we would like, with our greatest trading partner, with our ally in war.
Americans say, "Maybe you guys don't do enough in defense,' and maybe we should do more. But the United States of America's got 400,000 troops in the Pacific, 50,000 in Germany, about 40 or 50,000 in Okinawa. They've got tens of thousands in the Caribbean, 10,000 on the Mexican border. There's not even a Boy Scout on the Canadian border.
They don't have to worry about Canada because we've got their back. We've had their back for 100 years, and we've got an undefended biggest border in the world. That should count for something. That's the kind of relationship it's had. We've got 1,000 nurses a day crossing from Windsor to Detroit to work in hospitals in Detroit. That's the relationship we've always understood.
We've got a golf course in New Brunswick that's on the border. You drive in the parking lot and you're in Canada, and you tee off, you're in the States. And if you hook, you're in Canada, and if you slice, you're in Mexico. It's a true NAFTA golf course.
But really, that's what we want to get back to. So what Carney is saying, and I think Canadians really believe this, we can't change where we are. This is our neighborhood. We can't move. The United States is our neighborhood. They're the only neighbor we have. That can't change. They'll be our biggest trading partner, but we need more leverage in the relationships.
So, we need to move more goods to the rest of the world. We need to have other friend groups so that we don't only have one friend. And I hope the United States is not pained by us doing that, but it seems to me it's the logical result of treating us the way we've been treated. And I hope and pray, and I think every Canadian hopes and pray that we can get back, back to the way things were 'cause it worked pretty well.
Peter Haynes:
Do you feel as though the Americans are going to start upping the rhetoric, suggesting that maybe we're slow playing CUSMA negotiations? You read that from once in a while?
And how loud, how much, I'll use the word abuse, are Canadians going to have to accept through this negotiation for CUSMA? Is it going to be pretty loud and pretty negative towards, we're going to get our feelings hurt again?
Frank McKenna:
Yeah, I think so. The President doesn't use soothing rhetoric. If you read his Truth Social accounts at night, which I make the mistake of doing and wake up in a lather in the morning, I mean, he uses really incendiary language. And so he will, and the people around him who are sucking up to him, the bootlickers close to him, they all try to use more extravagant language than he did 'cause he likes that. So there'll be a lot of tough language coming at us.
The way things used to be, I went through the negotiations in 1989 when Mulroney did the free trade deal, probably were all signatories, and again in '83 when we did NAFTA, and then CUSMA and so on. The way that it's always worked is that you get in the trenches, and officials find points of friction and they fight it out, and then it gets set aside. And then the president and prime minister sit down and say, "Okay, let's fix this." And they fix it.
That's the way civilized people do it, but that's going to be tough right now. So there are three possible outcomes. The President could pull the shoot, which is the nuclear option. He could give six-month notice that he wants out. I think if he does that, it'll be devastating to our economy. I think it'll be devastating to their economy, too.
And the difference is, is that we're prepared to accept pain to save our country. I don't think Americans have any idea why they're fighting with Canada, so I don't think they're prepared to accept pain. I think he's got another problem, that between Iran and tariffs, inflation is running hot in the US. People are associating inflation with tariffs and wondering, "Why the hell we would do something which is inflationary," especially with Canada. So I think we have that going for us. And we have a lot of goodwill with people in the United States, in Congress, and on the street in the United States. So that's going for us.
The second thing he could do is just basically agree that this is really good for North America, "North America take on the rest of the world, and let's sign on again for the 16 years of the agreement." In other words, just continue what he negotiated three or four years ago. That would be the best result. The middle result is probably more likely and he'll say, "No, I like to keep the knife right at their throat." So, we'll just renew it for a year, which we have to, and that rolls over each year for the next 10 years."
So in that case, we'll just have to try to outlast them and hope we can get to a more reasonable administration in the United States, 'cause it's in everybody's interest to give our industry a long runway so they can make decisions based on a long-term horizon.
Peter Haynes:
We're going to have Chris Krueger on, who was recently named Global Head of our Macro Policy at TD Securities. We're going to have Chris on next month to talk a little bit about the midterms as we approach that important inflection point in US politics.
Last headline that I want to talk about before we open it up to the audience is pertaining to Alberta and the Alberta separation discussion, a topic that unfortunately is real and is an important issue for Canadians, and will remain so until it is resolved.
The headline pertains to Premier Danielle Smith and states, quote, "Smith won't hold separation referendum if remain side wins." Can you update our audience on the recent developments in the Alberta secession talks? And do you agree with Carney when he says he will negotiate or be part of this debate?
And I believe Danielle Smith said today that she would be part of this debate in favor of staying in Canada. Do you think it's right that the Prime Minister gets involved in this discussion or should he leave the local politicians to fight it out?
Frank McKenna:
Well, there's no right answer. Some people would resent his involvement. Some people would say, "He's the prime minister, he should." Over everything else, he's an Albertan. And the guy that will replace him if there's a change of government is in Albertan as well, Poilievre, and both of them will be fighting for Canada.
I just feel a profound sense of sadness about this, Peter. There's no other way to describe it. At a time when we're facing a very vigorous threat to our future as a country, from our neighbor to the south, and with all the other forces loose in the world, we should not be fighting internally within Canada. And so it makes me very, very sad. I've talked to Premier Smith about it. I think that-
Peter Haynes:
She seems to have upset everyone. She upset the separatists by doing a referendum on a referendum, and she's upset the federalists for allowing this to happen.
Frank McKenna:
Well, that's exactly right. And that's exactly what I've talked about with her, that you're sleepwalking. This is so much like Brexit, where Cameron wanted to release a little pressure within his party and called a vote, never thinking it would go through, but it did go through. And now, England is stuck. The United Kingdom is stuck circling the drain. I mean, literally that country's falling apart.
They're desperately trying to get closer to Europe, who they abandoned. And within the UK, all the political parties are fighting with each other. Scotland is, again, threatening to leave, and Northern Ireland and Wales. The United Kingdom could end up breaking up over this. It's a tragedy, is what it is. And in Canada, it's just so sad that we're going to go through this.
And what I've warned her and my friends in Alberta is, "Look, we've been through this. We've been through in Quebec." I fought two referendums there and we're about to potentially fight a third. It is so corrosive and so divisive. It is community against community. Already mayors in Calgary, and now Edmonton, have come out against this.
The next thing they'll come out and say, "Well, look, if you are separating, we're going to separate from you 'cause we don't want to separate from Canada." First nations are furious about it. And the next thing you're going to get, all the MPs from Alberta are going to be put on the line, "Are you in favor of separation or not?"
Well, that's going to be a pretty important answer that they give. All of the MLAs are going to be asked that question in Alberta. The corporate leaders, the CEOs of companies are going to be asked, "Are you a separatist or are you a Canadian? How are they going to answer that? And are they going to direct their corporations in a certain way?" People are-
Peter Haynes:
How are they going to answer that question?
Frank McKenna:
I don't know. I think somebody's got to say, "Okay, we're going to vote to separate." What does that do? It's like a dog chasing a car. What do you do with the car after you catch the car? Are you going to be a country within Canada? And you think it's hard getting pipelines through B.C. now. Imagine what it'd be like if you're a separate country. How are you going to carve up the Canadian debt? You can't leave us stuck with the bill. So we have to negotiate the debt and we have to negotiate the assets. And currency, are you keeping the Canadian dollar? What about a passport? Which password?
These are issues that people have to think about. Now, I think secretly, the leaders, the visible leaders of the separatist movement, would want to join the United States. But if you put that question to Alberta, you wouldn't even get a single digit number that want to join the United States. So, what's the game plan here? What do you really want to do? And now, she's got it so that it's really two questions. The first question is-
Peter Haynes:
I didn't understand the question, to be honest with you. It's ridiculous.
Frank McKenna:
Very difficult to understand. Do you want to remain in Canada or do you want to have a referendum about leaving Canada? I think everybody's going to be confused about it. And as you say, everybody's angry with her for that.
The saving grace for me, Peter, is that I actually watched and listened to what she said. And while I profoundly disagree with where she's going, I understand the politics of it. She's allowed a small but vocal group of separatists to take over her party, the rioting associations and so on. So, I can understand. I don't agree with it, but I understand it.
But if you listen to her language, she spoke as a passionate Canadian, talked about our country, about our history, about how it's so profoundly important we stay together, and so on and so on. So, having set the dogs loose, I do commend her for saying the right things, and declaring right at the outset, "I'm a Canadian. I want to fight for Canada."
Peter Haynes:
And she seems to have had a favorable view of the new prime minister as well, and the relationship.
Frank McKenna:
They have a great relationship, so that's the bizarre thing. If you were going to do this, why now? You've got a $35 billion pipeline that is full of oil, going to foreign markets, reducing the differential, dramatically improving the coffers of the province of Alberta and the government of Canada. The province of Alberta is probably going to skate onside fiscally as a result of oil prices in that pipeline.
You've got a government of Canada that's prepared to put 25, $30 billion into carbon capture and sequestration, which is a massive investment in Alberta. And support another pipeline to the coast with another million barrels of oil a day. And who just approved coastal gas and the doubling of coastal gas, bringing gas to the coast from Alberta, in many cases, for as many as five LNG projects that are going to take place. I mean, right now Alberta's got everything going their way, $100 billion of data centers on the books. If I were them, I would want to be pretty damn happy about where they sit in the country right at this moment in time.
Peter Haynes:
Is there one question from the audience we'll start with, and then I'll bring up Paul Beeston, and then we can ask any question after we talk about baseball? Is there one person? Do you mind if you could just come up to the mic here and you can ask Frank?
Speaker 3:
Frank, I'd love to know how you think the movie ends in Cuba.
Frank McKenna:
Yeah. Well, I'll tell you a little anecdote to start with. 20 something years ago, I was the chairman of CanWest Global, and Danielle Smith was a reporter in Calgary. And I got asked by the Aspers to go to the Turks and Caicos with Danielle Smith to see if we could negotiate Turks and Caicos joining Canada.
So I spent a weekend with her. When people say, "Do you know Daniel Smith?" I'd say, "Well, not much, but I spent a weekend with her in the Caribbean." Anyway, so Turks and Caicos really wanted to join. The advantage, we get a place in the sun, you don't have to have passports, you don't have to worry about health cards or anything, and Bob's your uncle. And they wanted to join us. We couldn't get it through the bureaucracy in Ottawa, but that's a different story.
So today, I met our minister recently and said, "Maybe we should take Cuba." And what does it do? Well, first, the Americans don't have to worry. We're not the enemy, number one. Number two, we got unlimited amounts of cigars and rum. And thirdly, they've got 10,000 doctors which have been down in Venezuela and other places that we could bring to Canada. We could fill our country with doctors. And we'd have a place in the sun where we could fly in, and Canadians could keep their currency in Canada and everything else.
Anyway, I just tell you that as an anecdote 'cause it's not going to happen. It's too big a swallow and so on. I think at the end of it, Cuba gets overtaken by the United States, whether they actually move in militarily or they just force them to collapse economically, Cuba can't survive without getting access to oil and other embargoed products.
Why are the United States making such a big fuss about a spit of land off their coast that has never done them any harm in 50 years? I don't know, but it's a real big political issue for Rubio, and I don't think they'll stop until they take Cuba.
Peter Haynes:
Okay. I'll now ask Paul Beeston to join us on stage here, where we'll pivot over to talk baseball and then at the end we can go in either direction. Welcome, Paul.
And as he's getting comfortable here, I have to tell a quick story. Paul joined our conference for five years ago as our keynote luncheon speaker. And anyone that's come to the conference knows that we always play Jeopardy, and it's Market Jeopardy.
And so, we have the three different contestants on stage answering all kinds of markets-related questions. And I'm sitting beside Paul and he's getting every question right. And I'm thinking, "You chose the wrong business."
So with that, Paul, welcome, and thanks for coming. And we're going to definitely get you on the baseball side 'cause we're obviously looking forward to seeing the Jays play the Marlins. So I'm going to start with a question for you. Why don't you give us your 50 game update on the Jays from good to bad? What do you think?
Paul Beeston:
Well, I mean, I don't think anybody can be very happy with where we started this year. I think we had aspirations of being a little bit better, and we had a schedule that was quite favorable to us when we started the season. It looked like that we were going to be in a position where we could, at least before we hit the big boys, get ourselves in a position where we would be maybe one or two. But the American League, for whatever reason, hasn't really distinguished itself this year. National League has been a lot better.
Peter Haynes:
Yeah.
Paul Beeston:
National League is winning the games that are league. We did not start out well. We didn't hit well. We can talk about our injuries, but I think at some point in time you have to sit back and say yourself, "Everybody's got injuries. Doesn't matter what."
How'd you like to be Detroit? I mean, I don't know whether Skenes is the best or Skubal's the best, but Skubal's not pitching for Detroit right now, and we were able to miss him.
I don't know how they do it in Tampa Bay, but they've been doing it for years. And take those games out of there. We could be over 500. You can look at any which way you want to look at it. I like to look at it as we're a game out of the wild card.
Yeah, we got 100 games to go. So we're in pretty good shape, really, that way. If in fact the pitching can go, the hitting can go, the guys can come back. Lucas is back now, and we can see directionally where we're going to go. It looks like Cease was a good acquisition. Varland is now the closer, and Hoffman is maybe in the position he should be in, and we'll have to wait and see.
Vladi's not hitting. I don't think we have to deny that. You don't like to knock your own players, but he's not driving the ball the way that he can. And perhaps once he gets going, like he's got the capability of carrying you for a week, two weeks, three weeks. And if he gets on that role, we can go.
But I would have to say generally speaking that you can't be happy, and we are a little bit disappointed, but the way that it's played itself out, there's great opportunity for the rest of the year. 'Cause I think we get to the playoffs. If Cease can pitch the way he is, gossip is going the way he's going, we'll see what Yesavage, we've got three pitchers.
You got a chance to at the end of July to make some additions to where you have to. And I guess I would say that I'm not really discouraged yet, but we've got to prove it. And the American League, Frank, you watch him. The American League has just not played well.
Frank McKenna:
No, we've been lucky in the American League, and we have had injuries. I thought the trade that we made with burning Moreno was wrong. He just looked to me, he had all the tools, fast and great hitter and everything, and that we should have kept him rather than Kirk.
I now think that Kirk is the guy. I've changed my mind completely, and I think we really miss him. He's kind of the field general out there, throws runners out. They're running like crazy on us, and so there's something wrong.
Paul Beeston:
You're absolutely right about Kirk. I mean, I don't think anybody thought we were going to miss him the way that we did. And it was kind of the fluke ball that just hit the glove and just put him out. But he hit, and he was one of those guys that was a timely hitter. You never really counted on him looking at the average, but you look at when the guy's on base, who do you want up? You want Kirk up? He's going to knock.
If he can get to first and it doesn't hit into a double play, he gets in the outfield, he's going to drive them in. But Kirk, we do miss. I'm glad you brought that up because I think of all of the guys that are gone, Kirk is the one guy because he, A, is that field general, but B, he is a terrific hitter and a terrific clutch hitter, and I think everybody's got confidence. And that's the key. That was the key to last year. And we had confidence in everybody.
Frank McKenna:
I'm going to ask just two technical, and then, Peter, you asked the important questions, but Guerrero, I love him to death. I love his style, I love his leadership, his joy of life, his feeling is terrific. I like the fact that he steals bases even though he shouldn't be. I like all of that, but I can't figure out how a guy that powerful can't get his launch angle better.
I mean, he smashes ground balls the hardest I've ever seen. So, with all the talent we have, and the pitching machines and technology, can't we get him to get the ball up in the air? That's one. And second, Okamoto. Again, he looked like a world beater and now he's just whiffing on everything. So, how do you fix something-
Paul Beeston:
Well, I don't know how you do it. I mean, last year Popkinson was kind of the guru of hitting. No matter who we put in there, he was actually kind of teach them.
I don't know what it is with Guerrero. I mean, because he's not hitting with power, he's not driving the ball, he's not pulling the ball. And you would think for all of this thing... I mean, you could go downstairs right now and I don't know who's pitching for the Marlins tonight.
Peter Haynes:
Junk, literally a guy named Junk. I'm not kidding.
Paul Beeston:
Junk will be pitching for the Marlins night, but they will have watched him. And they've got a machine down there, and it is not a machine that's just kind of a pitcher of him coming out. You think it's him. I mean, it's all it took.
Frank McKenna:
They programmed this pitcher in that machine.
Paul Beeston:
Absolutely no question with every pitch that he throws, but for whatever reason, Vladi doesn't get around it. Now, you remember, he didn't start off well last year either.
Frank McKenna:
No.
Paul Beeston:
And then he came on and then we got to the playoffs, he had a great play. This year, whether it was his interest in getting with the World Baseball Classic, but he was good for the Dominican. Not [inaudible 00:44:42] they didn't get to the end, but he was there. He does have that leadership. He does have... And you worry about him getting frustrated, because everyone wants it. When he starts breaking the bat, and then the occasion when he can't break the bat and he hurts his knee, it's not a good idea. But the reality of the situation is that we need to get him.
Now, the launch angle, it's funny you mentioned that because for a while there, we were all talking about launch angle. You don't want to hear it on television, "That's going out at 32 degrees." It's good. And the other day they were talking about it because it was something, he had the lowest launch angle for home run-
Peter Haynes:
Three. I think I heard three-
Paul Beeston:
... this year.
Peter Haynes:
... was his launch angle or something like that.
Paul Beeston:
Is what, Peter?
Peter Haynes:
Three, I thought I heard.
Paul Beeston:
Three? They almost put it [inaudible 00:45:26].
Frank McKenna:
Oh, yes.
Paul Beeston:
So my golf shot. But the bottom is that we've definitely got it. We've definitely got to get it up there. And I don't have the answer. And if anybody had the answer, because what you're seeing here is what everybody else knows.
Frank McKenna:
Yeah, of course.
Paul Beeston:
And so it's there. And Vladi knows it, and he'll be working on it. And you know what? After five years and six years of seeing what he can do, you know that this is not a fluke. This isn't one year. He does it and he hits the ball as hard as anybody in baseball.
Frank McKenna:
And Okamoto, what's wrong there?
Paul Beeston:
In Okamoto, I mean, I think he's getting adjusted. He started off slowly, then all of a sudden he started off well. I mean, he was carrying us and the home runs were getting out. Now, he's striking out if he's not hitting, but he's driven a couple balls, including yesterday, where he's driving in the guys. So, I think that it's one of those ones.
I mean, you're asking technical questions. You want to know about the finances? Why isn't he hitting? I can't really tell you that answer to that one, but I know that it's not one of those ones that they're not all on. I mean, I remember when I first started in this, this goes back, we had three coaches, and Bobby Doerr was part-time as our hitting coach. And now, we've got a hitting coach, an assistant hitting coach, an assistant to the assistant, and an associate who's just there to help them out.
So they're all there, they all know it, they're all working on it, and I'm not at all concerned that... 162 games. The thing about baseball, it's 162 games. And so we look at Vladi. I mean, he's maybe not drivable, but he's hitting 285.
Frank McKenna:
Oh, yeah.
Paul Beeston:
Well, 285 doesn't sound like a lot. I mean, it will put you probably in the top 20.
Frank McKenna:
Yeah.
Paul Beeston:
And he walks. He's got a good eye.
Frank McKenna:
He gets his walks.
Paul Beeston:
He gets his walks. And Okamoto right now is probably just finding himself. And so, let's just hold off, and then we'll come back in October and maybe discuss it at that point in time, because we're not a third of the way through the season, although we will be tomorrow, I think.
Peter Haynes:
Well, we do have a business crowd here. So, you mentioned the business of baseball, so why don't I pivot there? In December, the current collective bargaining agreement between players and owners expires.
Most baseball people believe that a strike is inevitable, with owners resolved to introduce salary cap and players and their representatives claiming, "The business has never been better, so no need to mess with success."
Paul, why is baseball the only major sport that doesn't have a salary cap? And do you think there can be an agreement on a salary cap structure as part of the December negotiations?
Paul Beeston:
Well, I think they're certainly talking about it right now. And so you talk about a salary cap, you talk about a floor. You've got to do all of those things. Baseball's never had one because of the fact that they've got a really, really strong union that started back in the late '60s and the '70s, and they fought it and they fought it and they fought it.
It's been tried to be implemented before. It's never been implemented. And eventually, we've not lost a season. We lost a World Series, but we haven't lost a season. So, we try to argue it out.
There is going to be a problem though. I was one that would never think I'd ever say, that I was pro salary cap. But at the point where certain teams can spend an inordinate amount of money, and other teams could never even get to, it becomes very, very difficult to say it shouldn't have a salary cap.
So, whether they get it or not, or whether they come up with a solution that will make both sides happy, I don't know. But the way that it is heading right now, I mean, it is heading towards Armageddon, in the sense that both sides are talking tough.
I mean, I was intrigued by everything that we were hearing today, or earlier about what's happening in Iran, what's happening [inaudible 00:49:11]. I mean, we're not that way because we're entertainment. I mean, that's not entertainment. That's real life. That's lives. That's everything. That's serious stuff.
This isn't serious stuff from the point of view of doing it, but we're heading that way. Everyone's talking tough. And until it gets to the reality, which is at the end of this year, as to directionally where we're going to go, I don't know.
I really can't answer that question, but there is a real push for a salary cap, and there is a real reluctance to accept a salary cap with the players. And also, they say the system works right now.
The system kind of works right now, but we'll play the 162 games, and where will the teams like Oakland or like Tampa Bay, where will they be at the end there? And can they win the World Series going against the big boys? That's the question.
Frank McKenna:
And do we want LA to win every year?
Paul Beeston:
No, we do not want LA to win one more year. They won too many.
Peter Haynes:
Can we talk about LA for a quick second? There's a story that the LA Dodgers make money on Shohei Ohtani through the deferred salary, deferred contract, and combine that with the marketing of him as a personality. How do you factor that into the negotiations on a salary cap?
Paul Beeston:
Well, you can. I mean, the way they do it on the salary cap, I mean, the way they're doing it right now is that they've signed him a 10-year deal. For people who don't understand it, they signed him for $700 million. He gets $68 million if it's deferred, and he doesn't take it till the final year. So the actual present value of it right now is somewhere around $400 million, which is a $40 million contract.
They sell all types of advertising, as do we try to sell advertising, but they have Ohtani and they have Sasaki and they have Yakamoto. So they have three guys to Japan. So they generate that revenue. And people think they get it from their uniforms and all that, but it's not that because that's owned by Major League Baseball, the retail sales. But where they get it is on the advertising. And you got to give them credit because they had a plan, they went out, and they have got the best of the Japanese players, and the lads have done their job.
I mean, Ohtani, I mean, when they started talking about him a few years ago as the best player ever. And then you just said, "That can't be." Then the more you see it, you see the home runs, you see the pitching, you see how fast he throws, you see how far the home runs go. I mean, you see yourself mad. We're seeing something that is uniquely special. It's tough enough to pitch.
Peter Haynes:
His ERA is 0.7 this year.
Paul Beeston:
I saw it. And I saw some of The New York Times say about how many pitches he's thrown over 100 miles an hour. We talked about that before. It's just there, so-
Frank McKenna:
He's a freak of nature.
Paul Beeston:
He is a freak of nature. He is a freak of nature. But you know what? The best part about? A happy freak of nature. I mean, if you see the ads that he does, I mean, he's an ambassador that every sport would love.
Frank McKenna:
Yeah.
Paul Beeston:
I mean, he doesn't even have to talk. I mean, he's got that smile. He's hitting those New Balance things and kicking it up. He's doing that all. He's magnificent.
So I mean, we have an advantage there, but it's going to be an interesting time. And it's difficult because the game, in a lot of ways, has never been better. Television rating are up, attendances are up, people are interested, and it's-
Frank McKenna:
And they're going to blow it up right at the wrong time.
Paul Beeston:
Well, you know what? At some point in time, maybe you have to do it. I mean, it's worked whether you could say it's work or not. I mean, depends on what side you're on, but basketball, hockey, and football have it. In a strange way, the European soccer leagues have it because they have so much that you can spend, and you can't spend over it. It's a function of revenue, but you're not going to take it back.
I mean, you can make it so that it's better for everybody. I mean, you could have a cap and it's better for everybody if you're going to spend that money, and you spread it around because we've got like the other sports. I mean, it's got to the point where there's people that are making a lot of money, and the people that are not making a lot of money, that are making the Major League minimum, and also that brings it down. So it's going to be interesting, but I'm hopeful that they don't do it. I think everyone's hopeful they don't do it and-
Frank McKenna:
You could toy with the luxury tax and-
Paul Beeston:
You could.
Frank McKenna:
... increase the amount and spread it amongst the other teams. I'm of that old-fashioned view, I hate to see people buying their way to championships. I like to see them win it on the field.
Paul Beeston:
I think we are all on that point where everybody's got at least an equal chance of getting there, and baseball is unique in that sense. But you know what? At the very end of the day, if you start looking at it, who's there at the very end? I mean, the teams are there at the very end. Let's not deny it, the Blue Jays are number four.
Frank McKenna:
Yeah, we're [inaudible 00:54:01].
Paul Beeston:
I mean, we're one of them. And you know what? And we were in on the... And give Rogers credit for it. I mean, that's the system, that's the rules. We're going to go out, we're going to try to sign Ohtani. We're going to try to sign Sasaki. We're going to try to sign Soto. We're going to try to sign those guys. So, we would use it to our advantage too if we could get them. We didn't, we weren't successful.
Frank McKenna:
Having money didn't work so well for the Mets either.
Paul Beeston:
It hasn't worked too well yet. There's no question about that. There's no question, and they've spent the cash.
Frank McKenna:
They would be in the top four. Right?
Paul Beeston:
Oh, definitely. They'd be number two. They would be number two. It'd be LA and then the Mets number two, but we're getting up there.
Peter Haynes:
You mentioned Paul Skenes. I was here on Saturday, actually, when the Jays played against Pittsburgh. Skenes didn't look great. He only struck out two guys, which is low. And he didn't miss a lot of bats, so that was interesting.
But there was a check swing on a Toronto Blue Jays batter, Jesus Sanchez, that was ruled not to be a strike, or not to be strike three in the sixth inning. And the Jays went on to score four runs and get Skenes out of the game in that inning.
The check swing call resulted in the eventual ejection of the Pirates' pitching coach and then the manager. And he got his money's worth, by the way, when he left. And that led to renewed calls for check swings to be reviewed in New York headquarters electronically.
What do you think of the challenge system and the ABS system for balls and strikes? And do you think we should move to electronic review of everything, including check swings?
Paul Beeston:
No, absolutely not. I mean, in fact-
Peter Haynes:
Is that because that call went to Jay's way?
Paul Beeston:
No, no, no, no. I'll tell you what. I mean, I think the people that are just picking up the game right now are missing the old confrontation between the manager and the umpires.
Peter Haynes:
Yeah.
Paul Beeston:
I mean, there was something there. You knew who the umpires were, you knew those arguments were happening.
Peter Haynes:
Yeah.
Paul Beeston:
What do you remember? You remember that he got his money's worth. Okay?
Peter Haynes:
Yeah.
Frank McKenna:
Yeah.
Paul Beeston:
I mean, that might be the only time this year you see that here where it happens, but there was that aspect to it. Yeah. And some of the balls and strikes, you can't challenge every ball and strike, 'cause an umpire's going to see what? He's going to see 300 pitches a day. He's not going to get every one of them right.
Peter Haynes:
No.
Paul Beeston:
That's a given. Okay? So now we'll give you two, and you can keep it going as long as you're right every time.
Frank McKenna:
And you're okay with that?
Paul Beeston:
I'm okay with that. I mean, a couple of them. 'Cause it really, as I think it plays itself out, it'll really start happening in the late innings because [inaudible 00:56:21]-
Frank McKenna:
Exactly. Right now, there's a lot of stupid calls.
Paul Beeston:
That's exactly right. And we've done it ourselves, where it's been early and it's been the catcher calling, and it's for the guy who set eight for the other team. It may not make sense there. But no, I don't think you want to do that for everything. I mean, and the check swing, I mean-
Peter Haynes:
I don't even know how you'd do a check swing electronically, but again, maybe they would create some model.
Paul Beeston:
It's subjective. I don't know how'd you do it either. It's still going to be subjective. I mean, so I don't know how you get around that, but you want it for a home run. Well, you want it for the balls inside or a base hit. But if you have it for everything, I mean, it's tough enough. Now, the good thing about this thing with the ABS, or the automatic ball strike, the fans are into this.
Frank McKenna:
Yeah, they are. Yeah, they are.
Paul Beeston:
It goes on television, it goes on the air. They're into this, so I mean there's that part of it, but you're limited. So you have to be a little judicious as to what you-
Peter Haynes:
Do you think the players and the managers like the system that we have today after it's been introduced? Do you get a sense from your conversations?
Paul Beeston:
Yeah, I think that they do. I don't think that there's any pushback on it. And you see, it's been in the minor leagues now for four or five years, so the players that are coming up are used to it. It's like all of it.
The game changes, the game evolves. And technology is there, and so you want to use it, but I don't think you can use it for everything 'cause it is a game of inches and you you can challenge so many things.
Frank McKenna:
You find out who's got a good eye, though, very quickly.
Paul Beeston:
Oh, you do, much indeed. You do, indeed, find that out. You do, indeed, find that out. But it's there and I think it's moving in the right direction. And the fact of the matter is, I think it's made the umpires a little more honest. I mean, the umpires themselves-
Peter Haynes:
I don't think they hate it because they don't want a call that they miss to cost a game.
Paul Beeston:
That's 100% right. It's not just that, Peter, but from the point of view of they didn't want to have the overturned. I mean, the guys that home played, he's the guy who's going to announce that it's overturned. That's his call.
Frank McKenna:
I go back long enough. I remember Mickey Mantle, Ted Williams, all those guys, but in one game the pitcher throws a pitch to Ted Williams and the umpire says it's a ball. He says it's a ball and the manager comes out, and he's going crazy and everything else. He said, "That was a strike." Umpire said, "If it had to have been a strike, Ted would've swung at us."
Paul Beeston:
Well, that's right. He could call. That's the point.
Frank McKenna:
Apparently he could pick up the rotation on the ball coming in.
Paul Beeston:
Well, that's what they say.
Peter Haynes:
Who was the greatest baseball player you ever saw with your eyes, not including Shohei?
Paul Beeston:
Oh, with my eyes?
Peter Haynes:
Yeah.
Paul Beeston:
Probably Barry Bonds is pretty well up there, but I would have to say that Willie Mays, I did see Willie Mays play.
Peter Haynes:
Oh, yeah. Oh, yeah.
Paul Beeston:
I saw Mickey Mantle play, saw Ted Williams hit, saw Roberto Clemente. I mean, there were a number. I mean, it's all on the eyes of the beholder, I think at that point in time. But you know what? Shohei has got to be there. But what was Babe Ruth?
I mean, you think of Babe Ruth. I mean, he was a pitcher and he was a hitter, and he hit for power and he had personality. I mean, he had the whole thing. So I don't know, but when you start looking at it and start with Barry Bonds, he could run, he could throw, he could hit, he could hit for power.
Peter Haynes:
But he's got a cloud. He has a cloud.
Paul Beeston:
He's got a cloud, but that cloud wasn't there when he was doing that. He was doing it for 12 years without the cloud. It was one of those guys that was just an absolute total natural. And I'm not saying he was the best, but he was up there.
Frank McKenna:
Somebody compared him to be Ruth, and the guy interjected and he said, "Well," he said, "Barry Bonds had to use substance." He said, "Babe Ruths did it on hot dogs and beer."
Peter Haynes:
Does anyone in the audience have a question for either Paul or Frank?
Speaker 5:
You were talking about Barry Bonds. Should he be in the Hall of Fame?
Paul Beeston:
Well, I can answer it this way. He's certainly got the numbers to put him in the Hall of Fame. I don't know, he's tainted with the drugs like Roger Clemens, like Alex Rodriguez. Their statistics would say that.
He had 10 years with the writers, and the writers didn't put him in. And there's lots of Hall of Famers themselves say that that is cheating. I don't know whether you want to accept that or don't accept that.
Frank McKenna:
Was it cheating when he did it?
Paul Beeston:
When he did it?
Frank McKenna:
Yeah.
Paul Beeston:
The answer to that is he's never admitted to doing it. And it's like Roger, I mean, they're all there. So it's a fair question. And I'll be honest with you. Ask me tomorrow, I might give you a different answer I give you today, because I can't make up my own mind.
Peter Haynes:
Can you tell us a little bit about Bobby Cox, who just passed away? You would have known him very well I-
Paul Beeston:
Well, I knew Bobby well. Bobby, we got hired in '82. He left here in '85 because he wanted to go back to Atlanta, or his wife wanted to go back to Atlanta, and he had been our manager. He took us from a Triple-A team right to winning 99 games in '85. And in '85 when we won 99 games, we haven't won 99 games in our history, well, we won the World Series.
Bobby had those kids believing in him. He had everyone on the same page, and he was just a terrific, terrific motivator of players. It's no strategy of managing games. I don't think any better than anybody else's, but everyone wanted to play for Bobby. Everyone wanted to play well for Bobby, and no one wanted to challenge him.
You didn't know how tough he was, but you weren't going to take a chance because he was just there to make sure that everybody was focused on one thing, and that is winning. You played the game the right way, you play it with respect.
So he left us and then he went back to Atlanta. Well, winning one championship in Atlanta was one thing, winning two or three leagues was another. He won 13 years in a row. Those were against good teams with big dollars and everything else. So, he was a special person. He was a special motivator, and he won 2,500.
He's got a record. I'm speaking of what you got to before, he's got a record and everybody beat. He got kicked out 155 times. And Coxy getting kicked out, that hat going, kicking dirt, doing all those things. I mean, it was a treat to watch. You guys don't see that anymore. I mean, we had Earl Weaver. We had Billy Martin. We had Bobby Cox.
Frank McKenna:
[inaudible 01:02:47].
Paul Beeston:
Exactly. You had those. But Bobby was just a special person that was, in a lot of ways, a lot more success than John Gibbons, but in a lot of ways, very much similar, in the sense that they'd be the first ones in the clubhouse, the last guy leave.
And they would be putting their uniforms on all the time as soon as they got there, and just part of the game, and then talk baseball the whole time. His idea, after we'd be talking what Frank's talking about earlier, about, "What is wrong with why can't we get the launch angle up there?" And Bobby was just a student of the game. Just a terrific guy.
Speaker 5:
Building on that, I was wondering, when you think about the World Series Championship Blue Jays, Cito Gaston was a huge part of that as well in motivating the players, getting us to the promised land.
When you commented earlier about the assistant to the assistant to the assistant, and given all the Moneyball statistics, and for that matter, all the players have a slew of advisors behind them and psychological coaches, how important is the job of a manager today, and what do you think is the makeup of a successful World Series winning manager?
Paul Beeston:
Well, successful making the players think that the better than they are. I mean, it's all in the head right now. When Cito was there, because he was a pretty good example, we had Gene Tenace, who was also a hitting coach and we had Larry Hisle. So, we really had three hitting coaches at that point in time that were doing it.
But in fact, with Cito, Cito was a guy that not everyone could have managed that team. That was a team of All-Stars and Hall of Famers. I mean, if you start looking at it. And so, to keep everybody happy, Casey Stengel had the great line about what's the successful manager. He said, "Keeping the five guys who hate you away from the five guys who are undecided." Okay.
And that's the story in business too. Keep the five guys hanging away from the five guys undecided, but you got to get the best of them, and it's all communication. I mean, in the old days, you didn't even have to worry about the press. You didn't have to worry about television. You didn't have to worry about the...
The manager's job is a lot, lot different than it is right now, because you're not just managing the players, you're managing, I don't want to say the front office, but the front office has got a lot of statistics now for all 30 teams, and in all sports, you can do it there.
So, you've got to take that input. I mean, the game is a lottery. It's not like finishing the game and going off for a few beers and say, "What went wrong?" It's now a matter of analyzing and, "What could we have done better and what should we have done better?"
And the game is much more of a business now. There's more risk in it. I mean, you sign somebody, you don't like, "Ohtani didn't work out," or, "Ohtani, you know what? $700 million. Or Soto doesn't work out at 700."
I mean, you think about it. You all go to your board meetings, you go everything else, okay? And someone says, "We're going to sign this guy. We're going to invest $100 million, or whatever we're going to invest in somebody." And we send out a scout says, "This guy's got a good loose arm. Let's sign him for $100 million." And we sign him. That's the business. And in baseball-
Frank McKenna:
And you get a Santander.
Paul Beeston:
Well, there's an example, but the real deal is that you've now got the exposure, the risk. And in baseball, as opposed to, there is no such thing as a non-guaranteed contract, for all practical purposes, once you get there. So, short of doing something that is criminal, you get your money. If you get hurt, you just lose your ability, you're still going to get your money.
So, I don't envy managers, in a lot of ways. That's why I would never ever disrespect the amount of money that they get paid right now, because again, I think it is a tough job, but it's the communication. No surprises. Operate the way you want to. I mean, there's a lot of these guys that... Tom as a starter was great, okay? But it was Tommy's way. Sparky was great. It was Sparky... Earl Weaver, who was going to question Earl Weaver? All those, you just didn't do that type of thing.
Now, it's a little bit different, and you're using much more of your roster. When I think of 1985, and that year that we won 99 games, we had Manny Lee and Ron Shepherd, which were two Rule 5... No, Lou Thornton, Lou Thornton, two Rule 5 guys that played A ball the year before. They never got in. Okay? So now we're down to 23.
Well, now we use Ron Shepherd, now we're down to 22 players. And Coxy was there, and he had everybody motivated, everybody. And those guys that didn't even get in would've killed for them when they got the opportunity to get in. They would've done what was necessary. So, I think it's really a motivational game from a manager's point of view, 'cause they've got everything else. They got every coach, every analyst, everything that they need.
Peter Haynes:
Your good friend, Pat Gillick, what were the most important moves that he made to allow us to win in '92 and '93? Is there one trade each year you can point to?
Paul Beeston:
Well, '92, '93. Well, the real most important thing was after the end of 1990 when we determined we couldn't win, that we had to change things up. And that's when the Mosebys were gone, and who else was on that team that we let go? There were a number of... George Bell that we let go in the pitching. And then we went out and we signed Roberto Alomar.
Frank McKenna:
[inaudible 01:08:15].
Paul Beeston:
And we did Roberto Alomar and Joe Carter.
Frank McKenna:
And Joe Carter. Yeah.
Paul Beeston:
Okay?
Frank McKenna:
That was a big deal.
Paul Beeston:
And that was a huge deal, but we signed Devon White.
Peter Haynes:
Who was a troubled player in California, I believe. He came with a bit of baggage, if I remember correctly?
Paul Beeston:
He did.
Peter Haynes:
Devon White. Yeah.
Paul Beeston:
And he was anything but. That's why I don't worry about it. I mean, when we got John Mayberry, I mean, he's a bit of an issue, he's a bit of issue. He was anything but a bit of an issue. He was part of the solution, not part of the problem. And just terrific guys.
I mean, I will say one thing, we had some really, really good, good people, and the benefit of winning is that it's a bond that stays with you forever. I mean, all those guys, when you see them, we were all in that thing together. We were a lot smaller back then, but we were all in it together. A little bit different when you don't win. Like last year's team won't be the same as if they had won. They would've had that bond for the rest of their lives.
Peter Haynes:
When did they bring you in as president when Gillick wants to make a big move in '92? Are you in the conversation all the way along or do they bring you in later?
Paul Beeston:
I'm in the conversation. They don't listen to me. I mean, it was one of those things. I don't fool myself into think they were listening to me. We had really good scouting staff, we had really good development staff. I could make my case and then they'd go and do what they want to do anyway, but it didn't make any difference. We were a lot smaller back then.
We only had 54 people in the office. I mean, they got 54 people in marketing now, but that's the deal. But the game has changed for everybody. The game has changed. This isn't a Toronto Blue Jay thing or this isn't a baseball thing. This is for everybody. It's just got to be a big business with tremendous risks.
Peter Haynes:
Speaking of big business, what do you think of the business of gambling and how it's impacting sports?
Paul Beeston:
Well, I would prefer it wasn't there. I mean, right from the very beginning, I had been the chairman of CAMH for a number of years, and so I'm well aware of what the gambling problems are, the [inaudible 01:10:13]-
Peter Haynes:
Are you seeing it? Is it exponential?
Paul Beeston:
Well, it's growing now. I mean, there's no question about that. And from the advertising point of view, from the United States, well, now we've got into this thing called prediction markets. Is that what it's called? And which is when you can bet on wars and you can bet on what the price of oil's going to be, you can bet on whether the Fed's meeting on the 16th of June. I was reading today as to whether it's going to be increased, stay same, or they're going to bring it down.
I mean, you can bet on everything. I just think it's a problem. We went up to Ottawa and met in front of one committee, I think it might have been the Senate. I'm not 100% certain it was there, about fighting the gambling. But as soon as the Supreme Court of the United States allowed it, everything was open. And then, we ended up with gambling in Canada. And we'd already had it, but it was basically the provincially-run entities, and now that's changed. So, I'm not for it. I'm not for it. No.
Peter Haynes:
Anyone else have any other questions for Paul?
Speaker 6:
Paul, I was just going to ask you a business question, going back to Peter's comment about the salary cap. I'm wondering, in baseball, do they have 100% revenue sharing? 'Cause there's always two teams on the field and I've always wondered, the ticket sales from LA, does 50% of that money go into a pot and paid out to everybody?
'Cause I guess the big thing with the NFL, is because so much is dominated by that one TV contract, split 30 ways, that it's kind of rounding air the stadium. And given the local media rights drive so much, do they revenue split everything? And is that
Peter Haynes:
But that's something that's not split. There's-
Speaker 6:
Would the players make that trade, saying, "If you share your revenue 50-50 at that point, we would consider a salary cap"?
Paul Beeston:
I don't know. I don't think so because I think we've probably tried everything in the past, and it hasn't worked. So, I think the fact that as soon as they start talking about it as soon as they could lose. I mean, it's one of those deals.
The revenue sharing in baseball is kind of unique. There are certain teams that can't qualify no matter what, like the New York teams, Los Angeles teams, Chicago Cubs, Boston, because if they're not bringing in the revenue, the theory is that it's their problem because they've got the opportunity to do it.
So, I don't think that's it, but it's not the 50-50. See, what the NFL did and Pete Rozelle did, right from the very beginning, what he did was he basically said, "We're taking all the television rights, and we're putting them all at one, and we're dividing it."
So, if you are the New York Giants, you're getting the same thing as the Green Bay Packers back then, which would had the smallest market. Or if you were Oakland A's, you were going to get the same as San Francisco Oakland As, Oakland, whatever the football team was back then.
Peter Haynes:
The Raiders.
Paul Beeston:
The Raiders. And so you're going to get the same amount of money. In baseball, the way that it always worked was you had your local rights. They've kind of minimized that, but with 162 games, you've got 150 games that are yours, you're local, and so there's that difference.
So, there is a way of sharing the revenue. It's as complicated as the salary caps in NBA and the NHL as to how it's divided up because there are certain exceptions.
But no, the answer is it's not a 50-50 split that way, and we don't have that national television package. The NBA, look what they did, and it just increased all their valuations. I mean, they went up, they did a 71 or $77 billion deal, billion.
Peter Haynes:
It's a big number. I'd be remiss if I didn't mention the fact that this is the 50th anniversary season for the Toronto Blue Jays, and you've been with the team since day one, as you were the first employee hired by the Jays.
What would you describe as your highs and lows? And can you tell us a funny story or two about the origins of the team? And how close exactly was Toronto to getting the San Francisco Giants instead of an expansion team?
Paul Beeston:
Well, there's a lot of information there. I mean, that's half a book. Where do you want me to start? The bottom line is the best part about the game is its people. We don't have a type of a product. I mean, whether you're a scout, whether you're a developer, whether you're a player, whether you're front office, I mean 90% of our money goes to salaries.
So, it's the people that you meet. It's the people that love the game. It's the people that are all there. We've been very fortunate in Toronto in having really good ownership. Okay? When Labatt, the CIBC, and Howard Webster owned it, and they owned it until '94.
Labatt owned it, at that point in time, till Rogers bought in 2000. So, dealing with them, and it was always that conviction that we wanted to win. And we always used the impetus that we were an international team and we get players up here, and more importantly, when they got here, they liked it.
And so we never really, I don't think, had a problem right from the very beginning. They could have got San Francisco. San Francisco was a team that was coming here, and then the mayor of San Francisco got involved, and they got a buyer in San Francisco, kept the team there.
And then the National League and the American League both wanted to expand, and they both wanted to come here. It was Toronto and Seattle. It was Toronto and Washington. Okay? Those were in the National League.
And there was a bit of a war, and Bowie Kuhn, who was the commissioner at the time, had to step in, and basically determined that it was going to be the American League that got them because they just came up here and preemptively announced, "We're coming to Toronto." Okay? Just did it. Just did it, "We're coming." And that worked out. As for stories, there's too many. Some of them, most of which you can't tell.
Peter Haynes:
Well, maybe when we finish up and get off the air, we'll hear some of the better stories. But thank you so much, Paul Beeston, for being our guest here on our Geopolitics podcast, which just devolved into a baseball conversation.
And of course to my colleague, Frank McKenna, who I've enjoyed six and a half years now of doing this podcast, and hopefully we can continue it on forever. So, thank you very much to everyone, and I hope you enjoy the baseball game.
Frank McKenna:
Thank you.
Peter Haynes:
Thank you.
Frank McKenna:
Thank you. Thank you, Paul. That's great.
Peter Haynes:
Thank you for listening to Geopolitics. This TD Securities podcast is for informational purposes. The views described in today's podcasts are of the individuals and may or may not represent the view of TD Bank or its subsidiaries, and these views should not be relied upon as investment, tax or other advice.