American telecoms and press large Rogers Communications expects to sell ownership in Maple Leaf Sports &, Entertainment, the owner of nine sports teams, including the Toronto Maple Leafs, football’s most important company.
The capital would be used to finance a mutually beneficial arrangement to obtain MLSE’s controlling stake.
On a Thursday morning earnings call with analysts, Rogers ‘ chief financial officer Glenn Brandt stated,” We continue to move forward with our agreement to purchase the 37.5 % additional ownership stake in MLSE for [CAD]$ 4.7 billion. Rogers will explore the best ways to finance this exchange in accordance with maintaining our investment-grade balance sheet, including raising capital in our activities and media investments, among other options.
In a September announcement, Rogers will buy the shares that rival BCE has in the form of a purchase. Rogers now owns 37.5 % of MLSE, which also owns the NBA’s Owls, MLS ‘ Toronto FC and the CFL’s Argonauts. Additionally, the company owns two esports franchises, as well as three lower tier basketball and hockey teams. Rogers individually owns MLB’s Blue Jays.
The purchase of BCE’s stake, for$ 3.26 billion at current exchange rates, is taxing on Rogers ‘ balance sheet: The business has CAD$ 900 million in cash and CAD$ 3.5 billion in available credit with banks. In comments made during the earnings call, Rogers management made the suggestion that a potential sale of Maple Leaf Sports ‘ equity is a possibility if a planned deal to raise CAD$ 7 billion from private equity giant Blackstone against a different aspect of Rogers ‘ business fails. That offer, selling capital in backhaul infrastructure—the natural equipment of its biological network—was initially disclosed in October. The position of the Blackstone offer may not be important: Rogers stated in a regulatory filing on Thursday that “private investors will likely be providing financing for the MLSE Transaction.”
On the income call, Scotiabank analyst Maher Yaghi said,” Buyers don’t like difficulties related to balance sheet problems. Can you decide to never shut the MLSE purchase for whatever reason? You stated that it might be possible to raise money to support the sports property. Does you explain the process for that? And why not, regardless of whether the downlink package is finalized?
Rogers CEO Tony Staffieri didn’t handle the construction or break-up questions directly, instead responding that company’s goal is to keep the company’s balance sheet, income and money flow. ” To be clear, our goal is to close on the MLSE exchange”, Staffieri said.
Buyers on the phone expressed concern that the Blackstone and BCE deals haven’t been moving more quickly. The Canada Radio-Telecommunications and Telecommunications Commission, a body with expertise in home equity and glad problems, is required to approve the deal because MLSE owns NBA Screen in Canada. In December, the MLSE get received certification from Canada’s competition committee to continue. One of the terms of the agreement is that BCE will maintain access to the Maple Leafs and Raptors’ 20-year articles rights for its TSN system, Canada’s premier sports channel.
Rogers received additional suspicion from a different researcher who claimed the property sector hasn’t seen much value in Rogers ‘ existing sports assets. ” Our possession in sports and leisure is important, and there’s considerable value which is not reflected in our discuss pricing today”, Staffieri said. ” Those resources continue to grow at double-digits costs in terms of value, and so it’s a great growth opportunity for us effectively”.
The NBA, NHL and MLS teams Maple Leaf Sports owns plus MLB’s Blue Jays are worth a combined$ 11.32 billion, according to the latest Sportico prices. In MLS estimates published Thursday, Toronto FC didn’t increase from its price last month, remaining fair$ 725 million, ranking seventh in the group. Rogers has a market capitalization of$ 15.9 billion.
” We have the unique ability to examine the entire ecosystem, from sports rights to the viewer’s experience, whether on a portable system or in their house.” And we believe we have a great opportunity to leverage on that,” Staffieri said.
Stocks of Rogers, a part of the Sportico Sports Stock Index, were at$ 28.94, off about half-a-percentage point in investing on the New York Stock Exchange Thursday night. The business is a cable TV company, owns 52 radio stations, a number of television networks, and has the largest mobile phone system in Canada. It reported revenue of$ 14.3 billion for its fiscal 2024 on Thursday.
Rogers spokespersons didn’t respond to inquiries for reply right away.