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Canadian Telecommunication Giants, Rogers and BCE, buy the MLSE


The deal asserts the telecom industry’s domination over sports broadcasting in Canada

By Khristopher Reardon, Staff Writer

The Ontario Teachers’ Pension Plan (OTPP) has sold their 79.5 percent stake in Maple Leafs Sports and Entertainment (MLSE) to Rogers and BCE, two of Canada’s biggest telecommunications companies.

This sale means the two companies now control one of Canada’s most heralded hockey teams as well as the Toronto Raptors, the Toronto FC, the Air Canada Centre, Leafs TV, NBA TV Canada and Maple Leaf Square. OTPP sold their stake in MLSE for $1.32 billion to the telecommunication giants.

The CEOs for Rogers andBCEmade the announcement at the Air Canada Centre, sparing a little time to take a couple harmless potshots at one another, making light of the unlikely pairing.

“MLSE is truly a world-class organization with some of the most iconic brands and popular sports teams across North America,” said Nadir Mohamed,Rogerspresident and CEO in a statement to Toronto Star. “This investment fits squarely into our strategy of securing premium content and making it accessible to Canadians when, where and how they want it.”

[pullquote]”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,” said Tanenbaum in a statement to TorontoStar. [/pullquote]

This deal comes after months of frustrating negotiations.

Provisions within a shareholders’ agreement made Larry Tanenbaum, team chairman and 20.5 percent owner, the gatekeeper to a deal for the MLSE and made it difficult for any telecommunications giant to take advantage of the MLSE’s broadcasting assets without his say.

Eventually, the back and forth negotiations culminated in a thumbs up from Tanenbaum, who informed the two competing companies he was ready to make a deal that would allow both companies a piece of MLSE. With the agreement struck, the companies divided up the 79.5 percent share with a little given to Tanenbaum bringing him to 25 percent ownership.

Tanenbaum, who helped edge the deal along, comes out a big winner, retaining his positions within MLSE and getting his stake in the company bumped up for helping the deal go through.

“I am excited to welcome our new partners Bell and Rogers,” said Tanenbaum in a statement to TorontoStar.  “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.”

When the OTPP were courting potential buyers for their share of the MLSE, both Rogers and BCE grappled for their stake in the company. This lead to months of difficult and intense negotiation. Anticipation built with fear over a potential deal to steal away broadcasting rights between both companies.

That kind of conflict, fear and potential to shut out one another made for strange bedfellows as these two came to an agreement, making, once rivals, allies in this bid, with Tanenbaum’s blessing to seal the deal.

Both telecom companies praised Tanenbaum for preparing the ground for both companies to come together over this deal which assures both of them a good share of the broadcasting assets over lucrative sports properties.

“Larry came to the table, solved the issues, and we moved forward,” said George Cope, CEO of BCE to the Globe and Mail.


ARB Team
Arbitrage Magazine
Business News with BITE.

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