Toronto taxpayers on the hook for World Cup deal, never 'made known' to city officials

Were officials unaware of World Cup funding plan? Toronto's city manager says elected officials were not aware taxpayers would be on the hook for all cost overruns to host World Cup games.

A so-called sweetheart deal that will see taxpayers foot the bill for cost overruns related to Toronto’s 2026 FIFA World Cup games was not “made known” to the city’s elected officials before it was signed, according to a new report.

A letter written by the City Manager confirmed Tuesday that the deal with Maple Leaf Sports and Entertainment (MLSE), which would see the city assume financial risk for the event, did not need council’s approval — and was binding.

“I think we’re a little worried that we might be on the hook for a fair amount of money here,” Councillor Paula Fletcher told CTV Toronto Tuesday. “If there’s cost overruns…MLSE doesn’t pay.”

A February letter of intent promised that MLSE would be kept “whole” for its role as host, including reimbursements for improvements to BMO Field and any lost revenues.

The deal was approved by city staff, who were authorized by council last July to negotiate on their behalf. Neither councillors nor the mayor were made aware of the specifics of the arrangement, according to the City Manager.

“The public expects councillors to provide oversight over public dollars, and it’s clear in this case that the terms and the directions that were given to enter into negotiation just weren’t good enough,” Councillor Alejandra Bravo said Tuesday.

“It’s a cautionary tale, and councillors have to think long and hard before they delegate more and more power to the public service,” Councillor James Pasternak said. “It’s nothing against the public service, but we are popularly elected and we’re responsible for governing, and we’re accountable for the decisions the city makes.

But Brock University Sport Management Associate Professor Michael Naraine said Tuesday that although there was no political sign-off, the deal is realistically the best option for the city.

“You don’t want to push too far if you’re the city,” Naraine said. “Because if MLSE walks away, there’s no one else in the geographic vicinity that could pull it off in the scale that MLSE can. We have to accept the fact that they are one of the best commercial rights operators from a pro-sports side of things.”

The city manager stressed that the agreement with MLSE leverages the company’s strengths, thereby minimizing risk to the city. Any cost overruns due to non-performance by a contractor or consultant would be recoverable under those agreements, he said.

Any sponsorship revenue from the tournament would be split between the company and the city.

MLSE is majority-owned by Rogers and Bell, the parent company of CTV News.