Rogers & Bell To Buy MLSE? WOW

Rogers & Bell To Buy MLSE? WOW

By TSM

Let’s assume for purposes of this post that the story broken by the Toronto Sun is true, that a deal is close to being completed and not only that it gets done.

Wow.

Last week the Toronto Star reported that a combined bid between Rogers and Bell to acquire the Ontario Teacher’s Pension Fund’s shares in MLSE had failed and as a result Teachers was taking their shares off the market. Nothing like a threat of “we’re no longer for sale” to get a deal back on track.

Tonight, the Toronto Sun is reporting that a deal is very close to being completed.

“Bell and Rogers represent TSN and Sportsnet, the No. 1 and 2 sports broadcasting powers in Canada, but they will call a truce and split the shares with so many lucrative deals to be spun off their union.

An announcement could come as early as Friday, but there are many moving pieces that could delay the final sale until closer to Christmas. MLSE runs the Toronto Maple Leafs, Toronto Raptors, Toronto FC, the Air Canada Centre and has high profile real estate holdings. They also own LeafsTV, as well as basketball and soccer television holdings. Rogers, meanwhile, owns the Toronto Blue Jays, making the baseball team an obvious addition to the new combined network.”

Stop and think about the ramifications about this news. I mean, radio, TV, web, mobile, publishing (does bell own any mags?). Talk about a deal with serious tentacles. It’s enough to give you a headache thinking about how this could actually work out if it gets done and all necessary governmental agencies and leagues bless a potential deal.

The National Post adds several interesting tidbits to the story:

“Larry Tanenbaum, the Toronto-based construction magnate who owns the remaining 20.47% of MLSE, would remain chairman as a condition of his support for the transaction contemplated by Rogers and Bell. As part of a shareholders’ rights agreement, Mr. Tanenbaum has first right of refusal on any attempted sale, and would have to approve any changes to the partners’ accord, including dividing the much-coveted broadcast and Internet assets.”

“Sources say the Rogers family had given their approval to buy the entire controlling stake from Teachers but chief executive Nadir Mohamed convinced them that a joint bid with a major competitor was the more attractive option.

As a result, the proposed deal by Bell and Rogers would see the 79.53% stake divided equally between the two telecom companies, who would also split the estimated $1.4-billion purchase price.”

What’s $700 million between rivals right???

Another interesting tidbit from the Sun story:

“There is speculation that John Tory, a former president and CEO of Rogers, will play a role in the new operation.”

Would he have to leave his post on CFRB 1010? 🙂

So, let’s think about the potential ramifications:

Rogers now will own a piece of every major team in town save for the Argos, including 100% of the Blue Jays and dome.
Rogers owns Sportsnet and the Sportsnet’s Fan 590
Bell owns TSN and TSN Radio 1050
Each has a “cable”, cellular and internet company.

The companies did cooperate on an Olympic tv deal, however they are fiercely competitive. Radio stations, tv neworks are openly hostile to one another. They compete for on and off air talent. They compete for television and radio rights.

To watch this get explained will be the stuff business school case studies are based on. Experts will say it’s destined to fail. Both companies have HUGE egos and I am not talking about the on air talent.

If MLSE currently makes big money on rights for any of their teams how will they handle that moving forward? Two things are certain, MLSE will continue to be very well funded and we, the fans are going to continue to pay a steep price. Having the Canadian media leaders owning this major asset we are assured, I think, that all distribution avenues are going to be exploited. Leaf, Raptors and TFC fans should be the beneficiary of unprecedented coverage and technological advances. Content will be readily consumable to those who are either Rogers or Bell customers on a wide range of devices. Xbox, iPhones, Ipads, you name it.

To be clear, there is no correlation between these two companies buying and any expected on ice/court success. You will hear how it will be more faceless suits owning the teams. Thats true. You will hear that this means winning will remain as elusive as ever. While this isn’t Bob Mckenzie and Nick Kypreos buying the teams, Rogers and Bell do at least understand the business of sports. That’s different than a teachers fund. There’s a difference between Richard Peddie and teachers leaders and Keith Pelly. Better? I have no idea. I do believe that at the very least these two companies have money invested in sports and understand the business side of it. Yes, I am aware of Rogers track record while owning the Jays.

In the end, it’s about the story right.? THE story on this site for the last while was the ever changing sports radio landscape in town. The story will clearly be on how this deal gets papered and approved should it actually get done.

Lots more to come

TSM

COMMENTS

WORDPRESS: 13
  • comment-avatar

    WOW! is right…It will be very,very interesting how this will all play out especialy in the broadcast department..and if Rogers family gave the go ahead to do this deal alone and then chose a joint bid with BCE I would think why? I guess time will tell…

  • comment-avatar

    Wow. Yeah, what a massive story.

    Should totally change the sports landscape in the city. It will be so interesting to see how this gets sorted out. I wonder how the broadcast rights will work? TSN and Sportsnet will essentially split the Leafs/Raps and TFC games I guess?

    Imagine how weird it would be if say, rival companies like Disney (ABC/ESPN) and Fox got together to buy the Dodgers (for example)? Man..

    Throwing in the Blue Jays and the Rogers Centre it really is a sports empire. As a fan (particularly a Jays fan) I hope this somehow becomes a positive for the teams on field/ice play. For the Jays and Raptors, I suppose it’s a plus being in an umbrella with the powerful Leafs. And for all three teams, at least you’d assume these media companies have a vested interest in putting forth competitive clubs. That being said Rogers haven’t exactly been receiving rave reviews from Jays fans recently.

  • comment-avatar

    One big difference between hockey and baseball is that there is a cap in hockey… so the owners can’t do anything more than spend to the cap (ok, they can bury contracts in the minors but let’s see if that loophole is still around in a year’s time). Meanwhile there is nothing stopping the Jays/Rogers from doubling their payroll if they so choose.

    All to say there is only so much the Leafs can do in terms of luring free agents with outlandish contracts.

  • comment-avatar
    itchy butt 9 years ago

    This is downright nutty! Can’t wrap my head around how they will handle all the broadcast rights. Who gets radio?

    Wonder if Thing 1 or Thing 2 will be in charge of MLSE?

  • comment-avatar

    […] are my thoughts from a few short hours […]

  • comment-avatar
    tweeter 9 years ago

    This is horrible. Too much control of the major sport franchises through corporations… Rogers being in on all of them. No wonder the Jays have had this supposed $120 million dollar payroll availability “yanked” back & tied to attendance! I see this as terrible, as the goal is not a winning product, but content for their media empires. My opinion anyway.

  • comment-avatar

    It’s kinda like the King Solomon thing except with a twist ending

    OTPP: Fetch me a sword! We’ll cut MLSE in two and give half to each corporation.

    Rogers: Go for it.

    Bell: Sounds good to me.

    OTPP: …

  • comment-avatar
    Andrew 9 years ago

    One upside to this. I can’t boycott the teachers pension fund, but Shaw will always be an option.

  • comment-avatar
    MEDIAJOE 9 years ago

    Kudos TSM for the very fitting 2 headed monster picture above regarding this corporate meger to buy MLSE! LOL

    1st off if you thought the FAN 590, TSN Radio & Leafs TV were already un-listenable…fasten your seat belts…because now that Robbers Comunications & Hell Media has bought MLSE get ready to get force fed a steady dose of annoying Leafs bias & MLSE homeristic commentary of biblical proportions on not only the radio but also on the 2 headed corporate monsters TV properties.

    2nd, if your a Robbers Communications or Hell Media customer expect to be constantly hit with nickle & dime price increases from these 2 MLSE corporate contolling monsters. It will become a common factor every time you open your Robbrers or Hell Media bill statements.

    This MLSE deal stinks of far too many media EGO’s and faceless back stabbing Toronto suits…this MLSE 2 headed corporate monster buyout merger will fail!!

    One possible positive…could this merger help to bring an NFL team to Toronto with a new and proper NFL stadium being built?

    Robbers suit Nadir Mohamed is a funny guy…called MLSE “A World Class Organization”…yet up behind him were the logo’s of some of the biggest losers in pro sports history. LOL

  • comment-avatar

    There is going to be one heckuva super network that will be build upon this along the lines of the MSG Network. My guess is that channel will not come for free and will cost more than your typical Leafs TV subscription!

    As far as cooperating together, sure they were able to collaborate on the Olympics, a money windfall, three week event. Taking that relationship long-term will be a real challenge.

    Also, these companies spent a good portion of the year undermining each other, and raiding talent only to get into bed. This has the feel of a Melrose Place plot!

  • comment-avatar
    MEDAIJOE 9 years ago

    I agree with TWEETER these corporations will absolutely use MLSE content to further their corporate greed via escalating price hikes on everything they pimp.

    You can take it to the bank folks everything to do with pricing with Robbers or MLSE or Hell Media will continue to escalate. And they have the perfect fan base in Leafs Nation to bilk too because they are the biggest suckers around as per the recent report naming Toronto Worst Sports City. LOL

    I thought this post off HF Boards today is bang on…

    Originally Posted by WendelBrown
    Seriously, this isn’t good. That bum Ulf who thinks that the organization is somehow going to become cheaper and more accessible to fans now that Bell and Rogers are owners… Somebody does’t have an internet or phone plan.

    The fact is, with the old ownership we were spending significant amounts in order to better our chances at winning now and down the line. We have the most expensive management team, the most invested into scouting, regularly used our money to gain advantages on ice (money for Franson, burying Finger, etc). That could be subject to change. It certainly isn’t something that should be taken as a given considering the history of both these companies in respect to gutless, gouging thieves who profit immensely off complete control of the Canadian market at the expense of the Canadian comsumers. It worries me that my favourite team is owned by these same scum, and it should worry you as well.

    Don’t get hosed…the alternatives to the 2 headed monsters folks…

    Wireless – Unlimited air time carriers like WIND & PUBLIC MOBILE
    Internet – Teksavvy & Primus etc
    TV – Shaw Sattelite

  • comment-avatar

    After the offical announcement on Blair show (Lajoie was filling in, now that’s the guy you want on after a huge announcement) and he said “Everything is better than a pension fund”. I guess he saying that they only care about nickles and dimes. But are stock holders any different?

    Heck I always thought the former MLSE was much better run than the Jays have been. The marketing focus for each individual team is not even close to the lazy stuff with the Jays. Stuff like practice arenas and fields and even putting natural grass on at the soccer stadium, while skydome is soon to be the only baseball stadium still on the artificial stuff.

    Listening to them this morning, I certainly haven’t changed my mind.

  • comment-avatar

    The leaf fans that comment on their fave team for tsn/sportsnet must be wetting themselves with glee. The popularity of that team continues to baffle, astound, and amaze.