Rogers buys out Bell’s stake in MLSE (37.5%, US$3.5B)

[Yukon Joe]

My internet sucks right now. Can someone look up and find a definitive answer on the important question with regard to Hamilton or GTA2:

DOES THIS REQUIRE BOG APPROVAL like a franchise sale does??!?!

Please and thank you!

What do you mean by "this"?

If you mean the purchase of Bell's share by Rogers - I mean I think it does, but it's an absolute technicality. Rogers has been part-owner of MLSE for a number of years. Rogers is the NHL's rights partner for a number of years as well. In what way would the BOG reject this?

 

[many76]

one question I have is, will rogers transfer blue jays ownership into the MLSE umbrella

 

[Takuto Maruki]

You can delay it all you want but eventually everything will end up in streaming. Already NFL is putting a lot of games on streaming services. Providers are pouring money to get exclusive streaming rights to build a stable subscriber base to sustain a move to streaming only as cable continues to wane.

I realize that. But Canada isn't exactly like the US, and the CRTC and the feds may not exactly be keen on a large chunk, or an entirety, of the TV contract for Canada's defacto national sport being exclusively on a paid streaming service that maybe most importantly *to them*, is wholly American owned.

I'm not sure that you can say that baseball does not matter to Canadians.

It does to some. Myself included. The issue is that in the grand scheme of things, baseball in Canada starts and ends with the Jays. Nothing else matters to these people when looking at the wider picture, and *most* baseball fandom in this country ends when hockey season has a whiff of being approached.

 

[KevFu]

What do you mean by "this"?

If you mean the purchase of Bell's share by Rogers - I mean I think it does, but it's an absolute technicality. Rogers has been part-owner of MLSE for a number of years. Rogers is the NHL's rights partner for a number of years as well. In what way would the BOG reject this?

They won't reject it.

But they now have leverage... like, "we'll approve this... IF you agree to a mathematical formula to set the valuation on your territorial rights to allow a future team into Southern Ontario."

(As in, now there's a number and if someone is willing to meet it, we can add them and MLSE just takes the cheque but can't stop it).


That's what MLB did with the Houston Astros sale. They wanted to have 15/15 in each league (Dumb, but they wanted it), so they said they'd only approve the sale of the Astros if the owner agreed to it and got it done).

 

[rojac]

Tanenbaum sold 5% I thought.

OMERS buys 5% indirect stake in MLSE from Tanenbaum for US$400M – Sportsnet.ca

I thought I read Tanenbaum will be selling the rest within 2 years, as Bell and Roger’s had the right to buy him out in 2026.

Yes, all true. I was talking about the arrangement that was put in place in 2012 when Rogers and Bell bought MLSE. And I believe technically OMERS, the pension fund, actually bought 20% of Kilmer Sports (Tanenbaum's company that actuallys owns the 25% share of MLSE.).

 

[Yukon Joe]

I realize that. But Canada isn't exactly like the US, and the CRTC and the feds may not exactly be keen on a large chunk, or an entirety, of the TV contract for Canada's defacto national sport being exclusively on a paid streaming service that maybe most importantly *to them*, is wholly American owned.

So this all gets very complicated.

First of all the US does have an equivalent to the CRTC - the FCC.

CRTC (and the FCC) has jurisdiction precisely because radio waves are a finite resource - there's only so much frequency available. So if you get a broadcast license it comes from the Federal government, and comes with certain conditions. The biggest concern in Canada is meeting Canadian Content regulations (CanCon). Even as TV stations expanded to cable (which doesn't have the same radio frequency restrictions) they're owned by the same companies and still had to follow a lot of the same regulations.

Streaming is completely different. There's no shortage of bandwidth. The Feds/CRTC don't quite have the same basis to regulate. Now CRTC has announced plans to impose some CanCom restrictions, the big streamers have sued to stop it - we'll see what happens.

But the thing is - the CRTC concern has almost always been about having Canadian content available. They don't want Canadians just getting nothing but US programming, with no Canadian content creators getting paid. The thing about hockey broadcasts though - is it is 100% CanCon. It's Canadian teams, playing in Canada, with Canadian production teams. So it would be doubly hard for the government/CRTC to complain about Canadian hockey games being streamed.

 

[Yukon Joe]

They won't reject it.

But they now have leverage... like, "we'll approve this... IF you agree to a mathematical formula to set the valuation on your territorial rights to allow a future team into Southern Ontario."

(As in, now there's a number and if someone is willing to meet it, we can add them and MLSE just takes the cheque but can't stop it).


That's what MLB did with the Houston Astros sale. They wanted to have 15/15 in each league (Dumb, but they wanted it), so they said they'd only approve the sale of the Astros if the owner agreed to it and got it done).

So the Astros was a complete sale though - not one partner buying out the other,

AS well - the NHL BOG is like an incredibly exclusive club, with only 32 members. Rogers has been a part of the club for 12 years. More than that - Rogers is giving the NHL over $5 billion dollars as part of their TV contract.

So while the NHL certainly could play hardball with Rogers are try to force such concessions - do you really think they would?

 

[joestevens29]

Thank god I locked in now to a new cell bill

 

[Takuto Maruki]

But the thing is - the CRTC concern has almost always been about having Canadian content available. They don't want Canadians just getting nothing but US programming, with no Canadian content creators getting paid. The thing about hockey broadcasts though - is it is 100% CanCon. It's Canadian teams, playing in Canada, with Canadian production teams. So it would be doubly hard for the government/CRTC to complain about Canadian hockey games being streamed.

I definitely think that line of reasoning is a fair one, but therein lies the rub: sure, if you look at it from a thirty thousand foot view, everything about a Canadian hockey game is CanCon. But the ultimate issue is that the profits that come from that bit of CanCon goes into the pockets of people in Silicon Valley, and not into the pockets of Canadian corps. It's a very stupid debate when you look at it like that, but that's really why I brought up the CRTC to begin with. You're already starting to see the feds push back against Meta and Google WRT how news from Canadian outlets is disseminated on their platforms, and it's left these corps angry that they aren't slavishly being catered to. I can certainly see some very loud elements of the Conservative base (as much as they looooove consistently dangling the idea of defunding the CBC) wondering why residual profits from Canada's national game are going to someone in Silicon Valley instead of Bay Street.

 

[Golden_Jet]

I definitely think that line of reasoning is a fair one, but therein lies the rub: sure, if you look at it from a thirty thousand foot view, everything about a Canadian hockey game is CanCon. But the ultimate issue is that the profits that come from that bit of CanCon goes into the pockets of people in Silicon Valley, and not into the pockets of Canadian corps. It's a very stupid debate when you look at it like that, but that's really why I brought up the CRTC to begin with. You're already starting to see the feds push back against Meta and Google WRT how news from Canadian outlets is disseminated on their platforms, and it's left these corps angry that they aren't slavishly being catered to. I can certainly see some very loud elements of the Conservative base (as much as they looooove consistently dangling the idea of defunding the CBC) wondering why residual profits from Canada's national game are going to someone in Silicon Valley instead of Bay Street.

Why are profits going to Silicon Valley.?

 

[Yukon Joe]

Why are profits going to Silicon Valley.?

The idea would be that if Apple or Netflix had NHL streaming rights that any profits would go to those companies (which are headquartered in California). The same would most be true for Amazon, even though headquartered in Seattle.

 

[Golden_Jet]

The idea would be that if Apple or Netflix had NHL streaming rights that any profits would go to those companies (which are headquartered in California). The same would most be true for Amazon, even though headquartered in Seattle.

TSN and Roger’s would still be players I assume. Don’t see any of them, or a combo getting all the rights. We are not close to that happening yet.

What is going to happen, is it’s likely to get worse for those that want to subscribe to every game league plays.

 

[ORRFForever]

it really feels like Bell/TSN is loading up to get the TV rights for the NHL in Canada

BCE is just paying off debt. The stock market is happy.

 

[ORRFForever]

I'm not sure that you can say that baseball does not matter to Canadians. And TSN only has ESPN Sunday Night Baseball and a few other ESPN games.

As for winter sports that matter to Canadians, you may be undervaluing the NBA, but I could be wrong. TSN also has curling which I believe does quite well for them.

TSN has the CFL, the NFL, college basketball, the World Juniors and, if they get the same regional NHL packages they have now, they will be fine. Bell did NOT sell MLSE to then give Rogers a TON of money for the national package. They sold to pay off debt.

 

[ORRFForever]

This has nothing to do with a 2nd Toronto team. Bell is in serious debt and needs cash.

This has been int he works for months. Ted Rogers wants to be the king of sports in Toronto and now he is.



Bell has a ton of debt, this is more about paying some of that off.

^^ Exactly. ^^

* BCE stock is down 33% from its high of 2 years ago.
* BCE stock is performing horribly while the rest of the market is near its all time high.
* BCE has an 8.22% dividend they need to pay annually - one of the biggest dividends in the country.
* BCE needs to get their financial house in order (analysts have been screaming for this for years) and this will help.

Do NOT expect BIG expenditures like :

* Buying another NHL team for Toronto;
* Bidding BIG for the national NHL package, or
* BCE buying an NFL team.

TSN will become the "Less Is More Network". Rogers, like always, is swinging for the fences.

Now that Rogers has control over MLSE, I worry about the Argos.

 

[ORRFForever]

Rogers stock, which is a horrible buy and always has been, is down on the news.

* BCE's debt WAS $39.5B - that includes building a 5G network for Canada. After spending all that money, the government told BCE they had to share the network. BCE must have been pissed altho, given Canada's track record, it should have been expected. Canada is where business comes to fail.

BCE has a market cap of $44.26B

* Rogers debt is $45.9B. Rogers has a market cap of $28.9B.

 

[aqib]

one question I have is, will rogers transfer blue jays ownership into the MLSE umbrella

If that means getting rid of Mark Shapiro sign me up.

Since we've been touching on streaming. Does anyone know why Facebook hasn't gotten into the act other than. A handful of MLB games a few years ago

 

[tarheelhockey]

that ship sailed a long time ago. 1) what will the NHL gain? New fans? Not likely. If they are going to expand it is going to be in an untapped market. Time to have this would have been prior to WW2. When you had 2 teams in NYC, Montreal. Now? If the Mets or Yankees didnt exist, doubt MLB puts a 2nd team in the market. Same for Jets/Giants, Cubs/White Sox.

The time for having 2 teams in market was when the money was made by selling as many tickets as possible. Build another stadium? That’s twice as many tickets being sold. And in the rare event that another league tried to start up a WHA-style challenge them, they couldn’t get into a profitable building.

National TV broadcasts changed everything. Now the real money is in the TV contract, and the TV audiences are drawn to the biggest brands. That means old established teams with multi-generational fanbases, not off-brand little-sister franchises. Until that changes, I really doubt we see another market get split.

 

[Takuto Maruki]

That means old established teams with multi-generational fanbases, not off-brand little-sister franchises. Until that changes, I really doubt we see another market get split.

And shit, even the latest to the party little sister franchise in the Clippers, with them moving into a new and shiny arena in Inglewood, are still going to be treated as second fiddle to the Lakers at best, even taking into account with the practically endless resources Steve Ballmer has. The Chargers are paying people to be fans, and are learning that being in the same stadium as a more popular team with relative (even if by this point, it's distant) history in LA is a worse fate then what they made for themselves in San Diego.

 

[ColinM]

^^ Exactly. ^^

* BCE stock is down 33% from its high of 2 years ago.
* BCE stock is performing horribly while the rest of the market is near its all time high.
* BCE has an 8.22% dividend they need to pay annually - one of the biggest dividends in the country.
* BCE needs to get their financial house in order (analysts have been screaming for this for years) and this will help.

Do NOT expect BIG expenditures like :

* Buying another NHL team for Toronto;
* Bidding BIG for the national NHL package, or
* BCE buying an NFL team.

TSN will become the "Less Is More Network". Rogers, like always, is swinging for the fences.

Now that Rogers has control over MLSE, I worry about the Argos.

I could see how this finally leads to the Argos demise. They offer nothing for Rogers in terms of content and they add maintenance to BMO field. If the Argos are lucky the will move to somewhere else in Southern Ontario but more likely TSN decides they are better off with an 8 team league that can produce 4 games a week over 19 weeks.

 

[ORRFForever]

I could see how this finally leads to the Argos demise. They offer nothing for Rogers in terms of content and they add maintenance to BMO field. If the Argos are lucky the will move to somewhere else in Southern Ontario but more likely TSN decides they are better off with an 8 team league that can produce 4 games a week over 19 weeks.

I disagree.

I could see MLSE selling the Argos to BCE/TSN for $1. After that, in order to keep the CFL alive and fill TSN's summer schedule, BCE would run the Argos. They've done it before... a few times.

TSN's summer schedule is empty minus the CFL. The CFL, as far as TV packages are concerned, is dirt cheap, so losing money on the Argos would be a rounding error on BCE's balance sheet.

Plus, Rogers does not want to be known for killing the Argos. Why not just give them to BCE, the competition, knowing BCE will lose money.

 

[tarheelhockey]

The Chargers are paying people to be fans, and are learning that being in the same stadium as a more popular team with relative (even if by this point, it's distant) history in LA is a worse fate then what they made for themselves in San Diego.

Chargers/Rams is a perfect example because they entered the LA market at the same time and had no recent fan loyalty to contend with (at least not from anyone under 50). By circumstance, the Rams got the early edge in the competition for fans, and that has very quickly translated into a completely one-sided relationship which will probably last as long as they’re both in LA. It was almost like a lab experiment to prove that the early bird gets the worm when it comes to brand loyalty in the sports market.

It’s the same reason that it will not ever matter what the Mets do, even if they win 10 championships in a row, most of the market will be thinking “wow, that’s 10 World Series in a row for the Mets, what does this mean for the Yankees?”

A new NHL team in Toronto would have the same dynamic, possibly even more exaggerated as the Leafs utterly dominate that market even moreso than any team could dominate NYC or LA.

 

[ORRFForever]

The Rogers family has forgotten more about business than I'll ever know but, when it comes to business fundamentals, Rogers is a mess. In 2017, the company had total debt of C$16.04 billion and a leverage ratio of 2.9x. In fiscal 2020, the company had a total debt of C$21.26 billion. Today : $45.9B of dent and a debt to equity ratio of 4.37.

I'm surprised a bunch of hedge funds haven't shorted Rogers stock into dust.

**

For YEARS, analysts have been screaming at BCE to pay down their debt and today, they did, but Rogers somehow gets a pass when Rogers has MUCH more debt on a real basis and as a percentage of market cap. Makes NO sense.

 

[Ciao]

^^ Exactly. ^^

* BCE stock is down 33% from its high of 2 years ago.
* BCE stock is performing horribly while the rest of the market is near its all time high.
* BCE has an 8.22% dividend they need to pay annually - one of the biggest dividends in the country.
* BCE needs to get their financial house in order (analysts have been screaming for this for years) and this will help.

Do NOT expect BIG expenditures like :

* Buying another NHL team for Toronto;
* Bidding BIG for the national NHL package, or
* BCE buying an NFL team.

TSN will become the "Less Is More Network". Rogers, like always, is swinging for the fences.

Now that Rogers has control over MLSE, I worry about the Argos.

You worry about the Argos?

Really?

I worry about Bell. I hate Bell, but they're in big trouble.

The Rogers family has forgotten more about business than I'll ever know but, when it comes to business fundamentals, Rogers is a mess. In 2017, the company had total debt of C$16.04 billion and a leverage ratio of 2.9x. In fiscal 2020, the company had a total debt of C$21.26 billion. Today : $45.9B of dent and a debt to equity ratio of 4.37.

I'm surprised a bunch of hedge funds haven't shorted Rogers stock into dust.

**

For YEARS, analysts have been screaming at BCE to pay down their debt and today, they did, but Rogers somehow gets a pass when Rogers has MUCH more debt on a real basis and as a percentage of market cap. Makes NO sense.

Rogers is a flash in the pan. Easy come, easy go. That's their MO.

I hate Rogers, too. I'm a double-hater, Canadian style.

 

[htpwn]

This has nothing to do with a 2nd Toronto team. Bell is in serious debt and needs cash.

This has been int he works for months. Ted Rogers wants to be the king of sports in Toronto and now he is.



Bell has a ton of debt, this is more about paying some of that off.

*Ed(ward) Rogers, not Ted. Ted was his late father (who's formal name was, of course, also Edward because... old money things).

But, yes, I think you hit the nail on the head.

Everyone is talking about the business implications, but Ed muscled out his mother and siblings from the company board and has had some strong opinions about how to run the Leafs/Raptors over the past few years (see the whole saga over extending Masai Ujiri's contract).

This looks like a personal decision to me: Ed wants to run sports franchises. The Leafs/Raptors may once again have, for all intents and purposes, an individual as owner.