Rogers buys Bell’s stake in Maple Leaf Sports and Entertainment for $4.7B

Rogers Communications Inc. is picking up BCE Inc.’s stake in Maple Leaf Sports and Entertainment (MLSE) — owners of the Toronto Maple Leafs and Toronto Raptors sports teams — for $4.7 billion. The companies announced Wednesday that Bell will sell its 37.5 per cent ownership stake to Rogers, “subject to relevant sports league and other customary approvals.” With the sale, Rogers would become the majority owner of MLSE with a controlling interest of 75 per cent. In an afternoon interview with Ron MacLean of Sportsnet, Rogers CEO Tony Staffieri said it was Bell that initiated conversations on the deal. “They reached out as to whether we’d be interested in buying their stake and discussions started from there,” Staffieri said. “It was a very good process between the two of us.” Staffieri noted that Rogers purchased its share in MLSE “together with Bell” 12 years ago, “and they’ve been terrific ownership partners with us.” “This opportunity came about and it was one that we felt fit immensely well with what we’re doing and where we are going,” said Rogers’ executive chair Edward Rogers in the same interview. Bell plans to put the money made through the deal, which is expected to close in mid-2025, toward reducing its debt levels and supporting its “ongoing transformation from telco to techco.” Bell said it will hold access to content rights for the Toronto Maple Leafs and Toronto Raptors for TSN for the next 20 years, via a long-term agreement with Rogers that it noted is also subject to league approvals. Rogers said that includes access to content rights for 50 per cent of Toronto Maple Leafs regional games and 50 per cent of Toronto Raptors games, for which MLSE controls the rights. Bell’s TSN will also continue to broadcast Toronto Argonauts and Toronto FC games through independent agreements with the respective leagues, Bell said. Neither Rogers nor Bell made representatives available for interviews with The Wire Report on the deal Wednesday. "We are proud of our time as co-owners of these iconic sports teams, and through this agreement have ensured that fans can count on Bell's continued support of their teams,” said Bell CEO Mirko Bibic in a press release. “Today's announcement demonstrates that we are focused on creating the financial flexibility to support our ongoing transformation and core growth drivers." Executive chair Edward Rogers said in a separate press release that Rogers is “committed to investing to bring more championships to Canada.” The company said the financing necessary for the purchase will not affect its debt leverage and that financing will include private investors. Rogers’ chief financial officer Glenn Brandt reportedly told analysts on the first quarterly earnings call of this fiscal year that the company was listing its data centres for sale to raise money as it worked to pay off debt related to its merger with Shaw Communications Inc. Brandt said the sale of Rogers’ enterprise data centres would not affect its wireless services, BNN Bloomberg reported in April, adding that the company did not confirm how many of its 12 data centres in Canada would go up for sale. A ‘positive’ for Bell Canaccord Genuity analyst Aravinda Galappatthige wrote Wednesday that the deal is a “positive” for Bell due to the resulting decline in debt. “The impact on Rogers is less straightforward and depends on further clarity on financing mechanisms and its longer-term plans for the sports asset base,” Galappatthige wrote. “To recognize the upside case for Rogers, one has to take a longer-term view. We believe that this transaction is a first step in Rogers setting up a larger SportsCo that would include the MLSE, the Toronto Blue Jays, Sportsnet, the Rogers Centre, and other assets. This conglomerate in turn could realize value for Rogers and potentially open up options for partial monetization,” Galappatthige said. Galappatthige, who noted the transaction values MLSE at $12.5 billion, up from $10.8 billion last year, also believes Rogers could acquire minority stakeholder Larry Tanenbaum’s 20 per cent stake as well under an existing put and call option structure in 2026. This is not the first divestiture Bell has made this year. In June, the company announced it is in the process of selling Northwestel to a consortium of Indigenous communities from the Yukon, Northwest Territories, and Nunavut for almost $1 billion. The consortium, Sixty North Unity, said earlier this year it will keep the telecom’s existing employees, but plans to increase Indigenous representation in the workforce through training and mentorship. According to reporting from the CBC, more people in northern Canada will be hired to replace the jobs previously filled by Bell. Bell will still be partners with Northwestel following the transaction, both through operational support and as Northwestel’s largest customer, the company affirmed. Northwestel spokesperson Matthew Bossons told The Wire Report in August that the finalization of the deal was still ongoing as of that time. Rogers building up content base Rogers has been building up its programming this year. In June, Rogers signed deals to take on programming from Warner Bros. Discovery Inc. and Comcast Corp.’s NBCUniversal. NBCUniversal’s Bravo channel will launch in Canada in September. The Warner Bros. Discovery franchises, including HGTV, The Food Network, Magnolia, the Cooking Channel and OWN, will run under the Rogers banner beginning next January. All are currently on Corus. Rogers also revealed that it is taking the Discovery, Motor Trend, Science, Animal Planet and ID channels away from Bell Media, with Bell later filing for an injunction over the matter. - Reporting by Hannah Daley at hdaley@thewirereport.ca with files from The Wire Report staff.

Rogers buys Bell’s stake in Maple Leaf Sports and Entertainment for $4.7B

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By Hannah Daley
| September 18, 2024

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By Hannah Daley
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