A couple of Canadian pension funds have found owning a stake in a sports stadium is not all fun and games.
The Hospitals of Ontario Pension Plan, Toronto, and the Manitoba Teachers Retirement Allowances Fund, Winnipeg, are part of a group that owns Toronto's SkyDome, the stadium with a retractable roof that is the home of baseball's Blue Jays.
The stadium, however, has fallen on hard times. It can't pay its property taxes, has sought bankruptcy protection and is up for a government-supervised auction in Ontario Court. Its owners are looking to close a sale by the end of the month.
"It hurts, but in terms of the size of the fund, it's an eye blink," said James Oborne, president of Mentor Capital Management Corp. in Winnipeg. Mentor Capital is a subsidiary of Manitoba Teachers and manages the C$1.6 billion ($1.06 billion) fund's assets. The fund paid C$5 million for its 5.2% equity stake in the stadium in 1994, he said.
Hospitals of Ontario has a 29.4% stake in the stadium. Edward Baker, the former chief investment officer at the C$14.5 billion pension fund, echoed Mr. Oborne's mild concern. Penfund Management Ltd. of Toronto, a private debt and equity firm, manages the investment for both funds.
Lowered attendance after the 1994 baseball strike is one reason the deal soured, Mr. Oborne said.
Another is the role of Belgian brewer Interbrew SA. When Interbrew bought Labatt Breweries in 1995, it became the largest single shareholder of the stadium, eventually controlling 48.5%. The Belgian beer giant also became the owners of the Blue Jays.
There is "stress" between the two sides, Mr. Oborne said. "The transaction was flawed. The major tenant also owns just under half of the equity in the building. Since the strike, the Jays haven't filled the stadium." The team's payroll has escalated since then, too, he added.
The next owner could be picking up a bargain. The price of the SkyDome has declined in the past decade. It cost C$580 million and opened in 1989. Five years later, the two pension funds were part of a group that paid C$160 million to the Canadian government for ownership. By December, one C$100 million offer reportedly had come from a group including a former Blue Jays executive.