Bell and Rogers Acquire 75% of Maple Leafs Sports & Entertainment

I have two press releases this afternoon, one from each of Bell and Rogers who have each acquired 37.5% stakes in Maple Leaf Sports & Entertainment. More later on how this could affect sports broadcasting in Canada, but for now here are the press releases from the two. First Bell, then Rogers.

Bell today announced it has, in a joint ownership arrangement with Rogers Communications Inc., purchased a net 75% ownership position in Maple Leaf Sports and Entertainment (MLSE) from Ontario Teachers Pension Plan. MLSE is Canada’s largest sports and entertainment company and owner of the premier professional sports teams in Canada’s largest marketplace: The Toronto Maple Leafs, Toronto Raptors, Toronto Marlies and Toronto FC.

“MLSE teams are among the most popular major-league franchises in North America, iconic sports brands watched and loved by millions of fans across our nation. As Canada’s largest and most established communications company, Bell is proud to be part of this all-Canadian acquisition of a world leader in sports and entertainment,” said George Cope, President and CEO of Bell Canada and BCE. “Bell’s ownership in MLSE supports our promise to deliver the best content to Canadians across every screen. With our advanced broadband network investments, next generation Bell TV, Mobility and Internet services, and leading sports networks TSN and RDS, the Bell team looks forward to bringing the Leafs, the Raptors, the Marlies and Toronto FC to fans in new and innovative ways.”

Bell’s net cash commitment, following a planned leveraged recapitalization of MLSE, will total $398 million, representing a 28% equity interest in MLSE, and will be funded with cash on hand at closing. Through a co-investment arrangement with Bell, the BCE Master Trust Fund, an independent trust that holds and manages pension fund investments serving the pension obligations of BCE Group pension plan participants, will contribute $135 million toward the MLSE acquisition. The total investments by Bell and the BCE Master Trust Fund equal the 37.5% equity interest to be acquired by Rogers.

In a concurrent transaction, Kilmer Sports Inc. (KSI) will increase its current 20.5% ownership interest in MLSE to 25%. KSI is owned by Larry Tanenbaum, who will continue to serve as Chair of MLSE and as a Governor of the NHL, the NBA and Major League Soccer.

The transactions are expected to close in mid-2012 following required regulatory and league approvals.

“I am excited to welcome our new partners Bell and Rogers,” said Mr. Tanenbaum. “I am proud this is a Made-in-Canada deal that will bring resources and expertise to help us win on and off the ice, court and pitch. This is a terrific path forward for our teams and our fans. It will ensure MLSE continues to make a positive impact in Toronto and across this great country of ours.”

The acquisition secures on a long-term basis access to TV, mobile, digital online and radio broadcast rights for both Bell and Rogers to the premier professional sports teams playing in Canada’s largest marketplace: MLSE also has major real estate and entertainment assets including the Air Canada Centre and the Maple Leaf Square condominium and commercial complex, operates three sports specialty TV channels, and is the exclusive partner of the NBA in Canada.

And now Rogers’ press release.

Rogers Communications announced today that it, along with Bell Canada, is jointly acquiring a net 75 percent stake in Maple Leaf Sports & Entertainment (MLSE) from the Ontario Teachers’ Pension Plan. The investment advances Rogers’ strategy to deliver highly sought- after content anywhere, anytime, on any platform across its broadband and wireless networks and its media assets, while strengthening the value of its sports brand, Sportsnet.

“MLSE is truly a world-class organization with some of the most iconic brands and popular sports teams across North America,” said Nadir Mohamed, President and Chief Executive Officer, Rogers Communications. “We’re excited to partner with MLSE to create highly interactive and engaging experiences for hockey, basketball and soccer fans, creating the perfect marriage of content and distribution. This investment fits squarely into our strategy of securing premium content and making it accessible to Canadians when, where and how they want it.”

Rogers has an extensive sports presence in Canada. The company owns the Toronto Blue Jays baseball team, the Rogers Centre, and the multiplatform Sportsnet brand. Today’s announcement further strengthens Rogers’ commitment to the Canadian sports landscape and complements the company’s strategic alliance with the Vancouver Canucks, including naming rights for the Rogers Arena, and long-term media agreements with the Edmonton Oilers, Calgary Flames, Ottawa Senators, MLB, NFL, NBA, MLS, CHL, NCAA, Rogers Cup, international soccer, UFC, and more.

“Sports is an integral part of our business and we’re committed to Sportsnet being the number one sports media brand in the country,” said Mohamed. “We’re passionate about sports and we look forward to building championship teams.”

Demonstrating its commitment to sport, Rogers has invested heavily in rebranding Sportsnet and is the first Canadian sports media brand to operate across five platforms: TV, radio, print, digital and mobile. Most recently the company launched Sportsnet magazine, Canada’s first and only national bi-weekly sports magazine. At the same time, this agreement enables Rogers to secure the best and most valuable sports content for its consumers, its partners and its media properties.

The company has invested substantially in leading-edge networks, such as LTE, Rogers on Demand, Rogers on Demand Online and mobile applications to bring Canadians the best content on their platform of choice. Most recently, the company launched live streaming of marquee sports properties, including Toronto Maple Leaf and Toronto Blue Jay games, Rogers Cup, FIFA World Cup, NBA TV and NFL Network.

Rogers’ net cash commitment, following a planned leveraged recapitalization of MLSE, will total approximately $533 million, representing a 37.5 percent equity interest in MLSE, and will be funded with cash on hand at closing. In a concurrent transaction, KSI Investments, owned by Larry Tanenbaum, will increase its current 20 percent ownership interest in MLSE to 25 percent.

“I am excited to welcome our new partners Bell and Rogers,” said Larry Tanenbaum, Chairman, Maple Leaf Sports and Entertainment. “I am proud this is a Made-in-Canada deal that will bring resources and expertise to help us win on and off the ice, court and pitch. This is a terrific path forward for our teams and our fans. It will ensure MLSE continues to make a positive impact in Toronto and across this great country of ours.”

Once the transaction closes, MLSE will be jointly owned by KSI Investments (25%), Bell and BCE Master Trust Fund (37.5%), and Rogers Communications (37.5%). Tanenbaum will continue to serve as Chair of MLSE and as a Governor of the NHL, NBA and Major League Soccer. Rogers and Bell have negotiated long-term sports broadcasting rights for MLSE content, at fair market value, for their respective television, wireless, digital and radio assets.

Maple Leaf Sports & Entertainment is Canada’s preeminent leader in delivering top quality sports and entertainment experiences to fans. MLSE owns and operates the Air Canada Centre, the NHL’s Toronto Maple Leafs, the NBA’s Toronto Raptors, MLS’s Toronto FC, the AHL’s Toronto Marlies, along with three television networks: Leafs TV, NBA TV Canada, and GOL TV Canada.

The transaction is expected to close in mid 2012 and is subject to regulatory and league approvals.

9 thoughts on “Bell and Rogers Acquire 75% of Maple Leafs Sports & Entertainment

  1. Can’t wait to see your posts as this plays out. This’ll be interesting to watch. With CBS/Yankees in the 60s, Fox/Dodgers and Disney/Angels in the 90s, and Rogers/Blue Jays, these deals haven’t really produced championship success. Ted Turner, TimeWarner and Liberty/Braves has probably been the best, but that’s only if you ignore the first 15 or so years of Turner’s ownership.

  2. I skimmed through it, but did either mention anything about creating actual winning teams, or did they both just try to promote their over-priced cell phones?

    • They did during the press conference. Bell seemed more concerned about the teams and fans though. They barely mentioned TSN or other things. Rogers mentioned “our multiplatform Sportsnet” every other sentence it seemed.

  3. This reminds me when the Ducks were brought in the NHL by Disney when the league was expanding and when those Anaheim Ducks were sold after the 2006 NHL Playoffs

  4. this came out of left field, on a Friday no less, and just on the heels of the Ontario teachers pension plan saying they were pulling MLSE off the market. lots of potential ramifications for broadcasting, both tv and radio. and doesn’t bell have a stake in the habs? conflict of interest?

    • The story first broke Thursday evening.

      Bell has an 18% stake in the Habs or something. Since they won’t be directly running either team, they plan on applying to the NHL to keep that ownership. They love having that stake because it gives them naming rights for the Bell Centre and gives RDS the inside track on Habs rights.

      • I’m pretty sure Bell went in on the Canadiens purchase a couple years back with the Molsons because they wanted to block a possible sale to Quebecor if they were willing to give George Gillett more money. That probably would’ve meant the eventual end of the Habs on RDS as Quebecor was intending all along to launch their own sports channel (TVA Sports). I guess Quebecor’s focus now is on getting a team in Quebec City.

  5. I know some leafs fans think this is not good for them with that i don’t really agree i think leafs fans come out of this better then fans of any other teams think of who is mlse going to market like crazy who are they going to get most of the prime time slots its going to be the leafs with other teams more or less on the back burners.

  6. And the monopoly of Rogers continues. What DON’T they own?

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