In buying out Bell's ownership share of Maple Leaf Sports & Entertainment, Rogers Communication is going all-in.
Rogers announced Wednesday it is purchasing Bell's 37.5 per cent share of MLSE for C$4.7 billion, giving it 75 per cent ownership of the sports conglomerate. Rogers and Bell currently hold equal shares.
MLSE chairman Larry Tanenbaum, via his holding company Kilmer Sports Inc., owns the other 25 per cent stake. OMERS, a Canadian pension fund, purchased a five per cent indirect stake in MLSE in the summer of 2023 through a 20 per cent direct stake in Kilmer Sports for US$400 million.
“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,” Rogers president and CEO Tony Staffieri said in a statement. “As Canada’s leading communications and entertainment company, live sports and entertainment are a critical part of our core business strategy.”
Assuming regulatory and league approval of the sale, Rogers — under executive chair Edward Rogers III — adds the NHL Maple Leafs, NBA Raptors, CFL Argonauts, MLS Toronto FC and AHL Marlies plus Scotiabank Arena to a current portfolio that includes Major League Baseball's Blue Jays and its Rogers Centre home.
The proposed sale, which Bell said is expected to close in mid-2025, puts the value of MLSE in its entirety at C$12.53 billion.
The deal should simplify MLSE matters, with one controlling owner.
"That unholy alliance of two competing telcos and then a minority shareholder (Tanenbaum) being the face of the entire organization was always difficult … A streamlined governance is the way to go," said Brian Cooper, a former MLS vice-president who is chairman of the MKTG Canada sponsorship agency.
Former MLSE president and CEO Tim Leiweke says the proposed sale "uncomplicates life and decision-making." He calls it "a very good deal for MLSE, for the partners but especially the fans."
Leiweke says Edward Rogers, whom he enjoyed working for, has the resources "to do whatever they've got to do to be competitive and to grow."
"And that gives (MLSE president Keith Pelley) and the rest of that organization huge resources, without debate. That's a good day."
Leiweke, who is president of the Oak View Group, also sees it as positive for Bell.
"They made a good deal. They had to protect their shareholders. They made them a ton of money and it's really brilliant on their part. Because they're a public company. So they have to be about return on investment."
In an interview with Sportsnet, Staffieri said Bell had reached out to Rogers about a possible buyout.
"And discussions started from there," he said. "And it was a very good process between the two of us."
Edward Rogers told Sportsnet his company had spent more than $14.5 billion over the last decade on sports.
"So it's a core business for us," he said. "And this opportunity came about and it was one that we felt fit immensely well with what we're doing and where we are going."
Bell said it plans to use proceeds of the sale "towards reducing debt levels and to support its ongoing transformation from telco to techco with a focus on core growth drivers."
"Today's announcement demonstrates that we are focused on creating the financial flexibility to support our ongoing transformation and core growth drivers," Mirko Bibic, president and CEO of BCE Inc. and Bell Canada, said in a statement.
Pelley, in a short statement, said MLSE "has been fortunate to have one of the very best ownership groups in sports and entertainment for many years and it has led to MLSE becoming one of the leading organizations in our industry."
"As an organization, we are grateful for their contributions, and we remain fully focused on our priorities and further driving a championship mentality across MLSE.”
Brendan Shanahan, president of the Maple Leafs, echoed that sentiment.
"We have great ownership here, we have my entire time since I've been in Toronto," he told reporters as the Leafs opened training camp. "We've been very blessed with the support that we get from ownership. We don't expect that to change with today's news.
"We've been communicated with well, we've been supported, and they're very committed to winning, as we are."
Whether Rogers looks to expand its share in MLSE even more remains to be seen. Under their ownership agreement, Rogers and Bell reportedly had the right to buy out Tanenbaum by July 2026.
While not one for the limelight, Tanenbaum is highly regarded and has represented the Raptors at the NBA’s board of governors and the Leafs with the NHL. But he has already begun to strike out on his own.
Rogers and Bell reportedly did not see eye to eye on the merits of a WNBA franchise, with Tanenbaum eventually securing a Toronto team under the Kilmer banner.
"It's not so much what they could do and agree on, it's what they weren't able to do," said Cooper. "Whether it's act on a timely basis or all agree on a purchase of another team to add into their quiver. Or to make a massive player acquisition for a team in contention at the end of the year."
There were also reports that Edward Rogers was not keen on the size of Raptors president Masai Ujiri's contract
While the Blue Jays currently occupy the American League East basement at 72-79 ahead of Wednesday's game in Texas, Rogers has not skimped on the team.
According to USA Today, the Jays had a season-opening payroll of US$221,862,600, which ranked seventh in the majors. Rogers reportedly also was willing to pay more than US$600 million to get Shohei Ohtani, only to see the Japanese star agree to a US$700-million, 10-year deal with the Dodgers.
Rogers, which owns Sportsnet, has also spent $400 million on renovations to the 35-year-old Rogers Centre.
Not to mention its $5.2-billion, 12-year NHL rights deal, which is set to conclude after the 2025-26 season. In May, Staffieri said he expects Rogers "to be at the table" at the next rights negotiations although he offered no hint on whether it will go it alone or seek a partner.
Rogers also has existing "strategic partnerships" with the NHL's Vancouver Canucks, Edmonton Oilers and Calgary Flames.
Bell, which owns TSN, is not giving up on sports content.
Rogers says the deal gives Bell 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 per cent of Maple Leafs regional games and 50 per cent of Toronto Raptors games for which MLSE controls the rights.
Bell says it has secured access to those rights for the Leafs and Raptors on TSN for the next 20 years through a long-term agreement with Rogers, subject to league approval. TSN will also continue to broadcast Argonauts and TFC games through independent agreements with the respective leagues.
Bell remains official telecom sponsor of the Raptors and will continue sponsorships of the Argonauts and Toronto FC.
Rogers said the purchase will not affect its 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.”
Rogers and Bell closed their deal to acquire an ownership position in MLSE in August 2012 after announcing the purchase from Ontario Teachers' Pension Plan in December 2011 via a C$1.07-billion bid.
In acquiring 75 per cent equity ownership in MLSE, they formed a holding company to govern their combined ownership position.
At the time, Kilmer Sports increased its 20.5 per cent ownership stake to 25 per cent.
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With files from CP hockey writer Joshua Clipperton
CP24 is a division of Bell Media, which is part of BCE Inc.
This report by The Canadian Press was first published Sept. 18, 2024