Rogers Completes MLSE Purchase and Expands Sports Portfolio

Rogers Communications has completed its acquisition of Maple Leaf Sports and Entertainment and is combining its sports holdings into Rogers Sports, creating a broader sports business that includes teams, venues, and media assets across Canada. The move follows years of investment as the company seeks to strengthen its business beyond telecommunications.

According to The Globe and Mail, Rogers closed the $4.35 billion deal with Kilmer Sports Inc. this month, giving the company full ownership of the Toronto Maple Leafs, Toronto Raptors, Toronto FC, Toronto Argonauts, and Scotiabank Arena. Rogers also owns the Toronto Blue Jays, Rogers Centre, and Sportsnet.

Rogers CEO Tony Staffieri said the company views the combined sports assets as a major strategic step after years of acquisitions and investments.

"We think it’s going to be a game changer and a real value differentiator for us in the Canadian landscape," said Tony Staffieri, CEO of Rogers Communications.

Staffieri said the company will focus on executing its strategy while reviewing the best operating model for Rogers Sports. Rogers plans to sell a minority stake in the combined sports business and use proceeds to reduce debt.

"Our job is to execute on our strategy and on our vision," said Tony Staffieri, CEO of Rogers Communications.

"It’s going to be for the market to decide," said Tony Staffieri, CEO of Rogers Communications.

Staffieri described the recent spending as part of a long-term direction for Rogers, which has owned sports and entertainment properties for decades.

"We’ve been sports and entertainment participants and owners for a long while," said Tony Staffieri, CEO of Rogers Communications.

Rogers said it believes its sports business is worth more than $25 billion and plans to offer as much as 30 percent of the combined assets to potential investors. The company is also seeking to reduce leverage after reporting about $40 billion in long-term debt.

"We’re feeling very good, very optimistic and very confident about our ability to deliver that," said Tony Staffieri, CEO of Rogers Communications.

Analysts have offered different views on the value of Rogers’ sports holdings and the impact of a minority stake sale. TD Securities analyst Vince Valentini said the market has not fully reflected the value of the assets.

"Is Rogers getting proper credit for the sports assets within its current share price? The answer is a resounding no, in our view," said Vince Valentini, TD Securities analyst.

Other analysts have raised concerns about Rogers’ negotiating position during the planned sale because the company needs to complete the transaction to support debt reduction efforts.

"I don’t think that gives them the best negotiating leverage at the table," said Liam Gallagher, Veritas Investment Research analyst.