By Holly Griffin, Ishaanika Gulzar, Kai Lim, Katerina Georgiou, Tomiwa Oshai (King’s College London); Abraham Vongkhamdy, Leo Fridjhon, Zin Nas, Janira Martinez, Amya Hillis, Irene Souny Bihr, Duc Le, and Christian Lippmann (Columbia University)
Photo: Alex Korollkoff(Unsplash)
Overview of the deal
Acquirer: Rogers Communications Inc.
Target: 37.5% of Maple Leaf Sports and Entertainment (from BCE Inc.)
Implied Equity Value: US$9.2 Billion
Total Transaction Size: US$3.5 Billion
Closed date: Q2 2025
Target advisor(s): CIBC (Financial), Blake, Cassels & Graydon LLP (Legal)
Acquirer advisor(s): Davies Ward Phillips & Vineberg LLP (Legal)
Deal intro:
In September 2024, Rogers Communications agreed to acquire Bell's 37.5% stake in Maple Leaf Sports & Entertainment (MLSE) for $3.5 billion as part of its ongoing investment strategy in Canadian sports. Once the deal is finalized, Rogers will hold a controlling 75% interest in MLSE. The agreement also ensures that Bell Media, a division of BCE, will retain content rights to broadcast Toronto Maple Leafs and Toronto Raptors games on its TSN sports network for the next 20 years.
The transaction will make Rogers the controlling shareholder, with a 75% interest in MLSE, solidifying its Canadian sports and media dominance. This strategic move allows Rogers to deepen its investment in Canadian sports, adding to its portfolio, which includes ownership of the Toronto Blue Jays, partnerships with NHL teams, and broadcasting rights through Sportsnet.
The transaction is expected to reshape the competitive landscape in Canada, where Bell remains a key rival. Bell’s TSN retains long-term content rights for 50% of Toronto Maple Leafs and Raptors games, ensuring its presence in sports broadcasting despite selling its stake. The deal reflects increasing competition in securing premium sports content as companies like Rogers and Bell seek to retain customer loyalty in a highly competitive market. Bell plans to focus on core growth drivers, using the proceeds from the sale to reduce its debt.
“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. As Canada’s leading communications and entertainment company, live sports and entertainment are a critical part of our core business strategy.” - Tony Staffieri, President and CEO, Rogers.
Company Details (Acquirer - Rogers Communications Inc.)
Rogers Communications Inc. is a leading Canadian telecommunications company offering various communications, media, and entertainment services. The firm operates through several key segments, including wireless, cable, and media. Rogers Wireless provides mobile voice and data services to consumers and businesses and is greatly focusing on expanding its 5G network capabilities. Rogers Cable offers high-speed internet, digital TV, and home phone services. The Rogers Media segment also covers television and radio broadcasting, publishing, and digital media.
Founded in 1960, headquartered in Toronto, Canada
CEO: Tony Staffieri
Number of employees: 26,000
Market Cap: $20.7bn (as of 16/10/2024)
EV: $53.9bn
LTM Revenue: $20.4bn
LTM EBITDA: $8.4bn
LTM EV/Revenue: 3.64
LTM EV/EBITDA: 8.84
Recent Transactions: Shaw Communications (2023), Seaside Communications (2021)
Company Details (Target - Maple Leaf Sports & Entertainment)
Maple Leaf Sports & Entertainment is Canada's largest sports and entertainment company and one of the largest in North America. It invests in four of the six major professional sports leagues: ice hockey, basketball, soccer, and football. The company also owns real estate in sports, including stadiums and training facilities.
Founded in 1931, headquartered in Toronto, Canada
CEO: Keith Pelley
Number of employees: 600
Market Cap: N/A
EV: $1.3bn
LTM Revenue: $540bn
LTM EBITDA: $89bn
LTM EV/Revenue: 16.4x
LTM EV/EBITDA: 14.6x
Projections and Assumptions
Short-term consequences
Upon completing the transaction, Rogers will double its previous share ownership in MLSE, holding a controlling interest of 75%, solidifying its dominance in Canadian sports and media. Rogers' sports broadcasting revenue grew by 7% in the June quarter; therefore, acquiring a larger stake in MLSE is expected to further boost its overall revenue amid declining cable TV demand.
Conversely, Bell’s TSN retains long-term content rights for 50% of Toronto Maple Leafs and Raptors games. For Bell, the immediate plans are to “reduce debt levels” with the purchase consideration, and the long-term plans continue to support the company’s ongoing transformation “from telco to techco.”
Merging Roger’s operations with Bell’s existing infrastructure may lead to operational disruptions, and disagreements may arise with minority shareholders, such as Larry Tanenbaum. Additionally, with Rogers already holding a significant share of MLSE, this deal could prompt competition concerns in Canadian sports broadcasting, raising issues with the Competition Bureau regarding reduced market competition. These factors could complicate decision-making and delay initiatives.
Roger’s Communications and MLSE's general stock movement has been downward due to broader investor concerns about the telecommunications sector in Canada, potentially relating to competition, debt levels, and regulatory pressures rather than any specific negative sentiment toward this acquisition.
Overall, while the acquisition positions Rogers for growth and expanded market reach and enables Bell to reduce its debt, the short-term consequences will involve a complex integration process with inherent risks and challenges that both companies must proactively address.
Long-term Upsides
Significant long-term benefits in revenue, diversification, and competitive edge will result from Rogers Communications' $3.5 billion acquisition of BCE's stake in Maple Leaf Sports and Entertainment (MLSE). Rogers gains more control over high-value sports assets like the Toronto Raptors and Toronto Maple Leafs by increasing their ownership from 37.5% to 75%. This allows them to profit from various revenue streams, such as ticket sales, sponsorship agreements, and more–all hauling significant revenues in the long run. In addition to other streamlined processes and strategic synergies, this merger offers prospects for cost efficiencies through fusing MLSE's content with Rogers' media platforms (such as Sportsnet). In the long term, this will increase revenue through cross-promotion, subscription packages, and the expansion of digital products, all of which will meet the rising demand for sports streaming content and establish Rogers as a valuable presence in the industry. In addition to strengthening its position in the recovering sports sector, Rogers' new 75% ownership of MLSE enables it to pursue environmental, social, and governance (ESG) initiatives. Long-term options include community programs, diversity initiatives as a major sports organization, and energy-efficient stadium operations to attract investors and consumers who care about the environment–all of which are potential avenues for them to explore. With the acquisition, Rogers is ideally situated to explore collaborations that capitalize on this significant source of income as the sports betting industry in Canada grows. Overall, the acquisition has the potential to strengthen Rogers' brand, diversify its revenue, and enhance its competitive edge in Canada’s media and telecom landscape, all providing significant long-term financial benefits.
Risks and Uncertainties
Rogers Communications’ acquisition of Bell’s 37.5% stake in Maple Leaf Sports & Entertainment (MLSE) presents several risks and uncertainties. Securing approval from regulatory bodies like the Canadian Radio-television and Telecommunications Commission (CRTC) and major sports leagues (NHL, NBA, MLS, CFL) is a crucial challenge. With Rogers already holding a significant share of MLSE, this deal could prompt competition concerns, particularly in Canadian sports broadcasting, raising issues with the Competition Bureau regarding reduced market competition.
Operationally, transitioning from co-ownership to majority control poses risks. Rogers must restructure management processes previously shared with Bell, and disagreements with minority shareholders, such as Larry Tanenbaum, could complicate decision-making and delay initiatives. It's important to note that historical tensions, like differing views on expanding a WNBA franchise, could potentially lead to internal friction, underscoring the need for effective management and communication.
Financially, the $3.5 billion acquisition is substantial. While Rogers has indicated the deal won’t significantly impact its debt leverage, economic downturns could strain this outlook. The company plans to drive synergies through cross-promotion and bundling offerings between its teams, such as the Blue Jays, Maple Leafs, and Raptors. However, overestimating these synergies or encountering shifts in consumer spending patterns could reduce anticipated financial returns, affecting profitability in the long run.
Given that Rogers now controls most of the company, it is unclear if it would be interested in acquiring Tanenbaum's 25% position or further growing its ownership. Future disputes or a prolonged negotiating process might arise from this, especially if the minority ownership now in place has an extensive amount of influence.