Rogers to Become Majority Owner of Maple Leaf Sports & Entertainment

Rhea-AI Summary

Rogers Communications Inc. (TSX: RCI.A and RCI.B, NYSE: RCI) has announced an agreement to acquire Bell's 37.5% ownership stake in Maple Leaf Sports & Entertainment (MLSE) for C$4.7 billion. This transaction will make Rogers the majority owner of MLSE with a 75% controlling interest. The deal aims to expand Rogers' investment in Canadian sports and entertainment, with a commitment to bringing more championships to Canada.

Key points:

• Rogers plans to continue investing in MLSE's sports teams
• Financing will not affect Rogers' debt leverage and will include private investors
• The agreement ensures long-term Canadian ownership of iconic teams
• Sportsnet will continue to broadcast 50% of Maple Leafs regional games and 50% of Raptors games controlled by MLSE
• The transaction is subject to league and regulatory approvals

Positive

• Acquisition of Bell's 37.5% stake in MLSE for C$4.7 billion, increasing Rogers' ownership to 75%
• Strategic investment expected to surface more value for shareholders long-term
• Financing structure will not affect Rogers' debt leverage
• Retention of 50% broadcast rights for Maple Leafs regional games and Raptors games
• Expansion of Rogers' sports portfolio, potentially increasing revenue streams

Negative

• Large capital expenditure of C$4.7 billion for the MLSE stake acquisition
• Potential regulatory scrutiny due to increased market concentration in sports and media

Insights

Financial Analyst

This C$4.7 billion acquisition by Rogers is a significant move in the Canadian sports and entertainment landscape. The deal will give Rogers a controlling 75% stake in MLSE, a premium asset with potential for long-term value appreciation. While the immediate financial impact may be neutral due to private investor financing, the strategic benefits are substantial. Rogers' expanded ownership in MLSE complements its existing sports portfolio, potentially creating synergies and enhancing its competitive position in the media rights market. However, investors should note that the transaction's success hinges on regulatory and league approvals, which could present hurdles. The deal's long-term value will depend on MLSE's performance and Rogers' ability to monetize its increased stake effectively.

Sports Business Expert

Rogers' move to become the majority owner of MLSE is a game-changer in the Canadian sports industry. By consolidating control over major Toronto teams like the Maple Leafs and Raptors, Rogers strengthens its position in the lucrative sports content market. This vertical integration strategy, combining team ownership with media rights, could lead to increased revenue streams and negotiating power for future broadcast deals. The commitment to invest in bringing championships to Canada could boost fan engagement and team valuations. However, the C$4.7 billion price tag is steep and ROI will depend on Rogers' ability to leverage MLSE's assets across its media platforms. The retention of Bell's broadcast rights for 50% of games suggests a balanced approach to maintaining market competition, which may help in securing regulatory approval.

Media Rights Specialist

This deal reshapes the Canadian sports media landscape. Rogers' increased stake in MLSE gives it unprecedented control over premium sports content in Canada's largest market. The agreement to allow Bell to retain 50% of Maple Leafs and Raptors broadcast rights is crucial, as it maintains some balance in the market and could ease regulatory concerns. For Rogers, the real value lies in the potential to create exclusive content, cross-promote across platforms and potentially launch new digital offerings. The transaction could lead to innovative content distribution strategies and possibly higher subscription fees for sports packages. However, the high acquisition cost means Rogers will need to significantly boost MLSE's revenue and profitability to justify the investment. The deal's impact on competition in the Canadian media market will be a key focus for regulators.

Signs agreement to buy out Bell’s 37.5% ownership stake in MLSE

Will invest to bring championships to Canada

Sportsnet will continue to broadcast 50% of Maple Leafs regional games and 50% of Raptors games controlled by MLSE

TORONTO, Sept. 18, 2024 (GLOBE NEWSWIRE) -- Rogers Communications Inc. (TSX: RCI.A and RCI.B) (NYSE: RCI) (“Rogers”) today announced it has signed an agreement to buy Bell’s 37.5% ownership stake in Maple Leaf Sports & Entertainment (MLSE) for C$4.7 billion. 

“MLSE is one of the most prestigious sports and entertainment organizations in the world and we’re proud to expand our ownership of these coveted sports teams,” said Tony Staffieri, President and CEO, Rogers. “As Canada’s leading communications and entertainment company, live sports and entertainment are a critical part of our core business strategy.”

Will continue to invest to bring championships to Canada
Rogers has invested $14 billion in Canadian sports over the last decade. With this transaction, Rogers will continue to invest to bring championships to Canada.

“Winning is everything for fans, and that’s why we’re committed to investing to bring more championships to Canada,” said Edward Rogers, Executive Chair, Rogers. “We’re passionate about sports and we’re passionate about winning.”

Strategic investment will surface value long-term
Financing for this transaction will not affect Rogers debt leverage and financing will include private investors. 

“MLSE continues to appreciate significantly, and together with our sports and media assets, we plan to surface more value for shareholders long-term,” said Staffieri. “This agreement also ensures long-term Canadian ownership and investment of these iconic teams.”

Deepens investment in Canadian sport
This agreement adds to Rogers existing sports portfolio including ownership of the Toronto Blue Jays, Rogers Centre and Sportsnet, the number one sports network in Canada. The company also has strategic partnerships with the Vancouver Canucks, the Edmonton Oilers, the Calgary Flames and the NHL. When the transaction closes, Rogers will be the largest owner of MLSE with a controlling Interest in 75% of MLSE.  

The deal will provide Bell with the opportunity to renew its existing MLSE broadcast and sponsorship rights long-term at fair market value. This includes access to content rights for 50% of Toronto Maple Leafs regional games and 50% of Toronto Raptors games for which MLSE controls the rights. The transaction is subject to league and regulatory approvals.

About Rogers Communications Inc.
Rogers is Canada’s leading communications and entertainment company and its shares are publicly traded on the Toronto Stock Exchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI). For more information, please visit rogers.com or investors.rogers.com.

For more information:
Media
media@rci.rogers.com
1-844-226-1338

Investor Relations
investor.relations@rci.rogers.com
1-844-801-4792

About Forward-Looking Information 
This news release includes “forward‐looking information” and “forward-looking statements” within the meaning of applicable securities laws (collectively, “forward-looking information”) about, among other things, the transaction and the financing, including our receipt of any required league or regulatory approvals and the anticipated benefits of the transaction, and our debt leverage. 

This forward-looking information is based on a number of expectations and assumptions as of the date of this news release. Actual events and results may differ materially from what is expressed or implied by forward‐looking information if the underlying expectations and assumptions prove incorrect or our objectives, strategies or intentions change or as a result of risks, uncertainties and other factors, many of which are beyond our control, including, the following: the transaction or the private investor financing may not be completed on the anticipated terms or at all; we may instead fund all or a portion of the transaction purchase price through alternate sources, including debt or equity of Rogers Communications Inc., due to league requirements, general economic and market conditions, or other internal and external considerations; the anticipated benefits of the transaction may not be realized; the transaction is subject to closing conditions and termination rights; and our exposure to the risks associated with sports franchises may increase following completion of the transaction. We are under no obligation to update or alter any statements containing forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.  

FAQ

What is the value of Rogers' acquisition of Bell's stake in MLSE?

Rogers Communications Inc. (RCI) has agreed to acquire Bell's 37.5% ownership stake in Maple Leaf Sports & Entertainment (MLSE) for C$4.7 billion.

How will Rogers' ownership percentage in MLSE change after this acquisition?

After the acquisition, Rogers will become the largest owner of MLSE with a controlling interest of 75%.

Will the MLSE acquisition affect Rogers' (RCI) debt leverage?

According to the announcement, financing for this transaction will not affect Rogers' debt leverage and will include private investors.

What broadcasting rights will Rogers retain for MLSE teams after the acquisition?

Rogers' Sportsnet will continue to broadcast 50% of Maple Leafs regional games and 50% of Raptors games controlled by MLSE.

When is the Rogers-MLSE acquisition expected to close?

The press release does not specify a closing date. The transaction is subject to league and regulatory approvals, which will determine the timeline.