TORONTO (Reuters) - Rogers Communications is in talks to buy a majority stake in Maple Leaf Sports and Entertainment, which would give it pro hockey’s Toronto Maple Leafs, pro basketball’s Toronto Raptors, and a dominant hold on Canadian sports broadcasting, a newspaper said on Wednesday.
The Toronto Star said Rogers, one of Canada’s biggest telecom and media businesses, is offering C$1.3 billion ($1.3 billion) to buy a 66 percent stake in MLSE from the Ontario Teachers’ Pension Plan.
It would be the largest deal in Canadian sports history and would give Rogers control of all of the top professional sports teams in Toronto, Canada’s biggest city, with the exception of the Argonauts of the Canadian Football League.
Rogers already owns Major League Baseball’s Toronto Blue Jays. The deal with Maple Leaf Sports would also give Rogers the Toronto Marlies of the American Hockey League and the Toronto FC of North America’s Major League Soccer.
The Toronto Star, citing sources close to the deal, said it was not clear if Rogers was the only bidder.
A Rogers spokeswoman said that company does not comment on “rumor or speculation,” while a spokeswoman for MLSE said it had no knowledge of any discussions taking place.
“If there were any (discussions) it would be an ownership matter so I would refer your questions to the Ontario Teachers’ Pension Plan,” spokeswoman Rajani Kamath told Reuters.
Teachers’ said its policy was “to neither confirm nor deny such stories”.
Andrew Zimbalist, a sports economist at Smith College in Northampton, Massachusetts, said the C$1.3 billion price quoted by the Star was a hefty one.
“It’s an over-valuation and a significant over-valuation of the Maple Leafs, and the only explanation that I can think of is that there are synergies and the primary synergy is that it will enable them to control the sports broadcasting market, certainly in Ontario and Toronto, but largely throughout Canada by controlling these teams,” he said.
Zimbalist said controlling the teams would let Rogers, which owns TV sports broadcaster Sportsnet, “weaken if not to bury” its main competitor, TSN, which is in the process of being bought by Bell Canada parent BCE, a major Rogers competitor.
The report said a deal would include all MLSE’s sports properties, including TV stations, but not its real estate holdings.
“It’s a very interesting strategic play, and one would think it’s a good strategic play, but one can’t really pronounce judgment until one gets confirmation about what the price is and what the terms are,” Zimbalist said.
Maple Leaf Sports owns prime sporting real estate, including the Air Canada Center, where the Maple Leafs and the Raptors play, and various other properties, along with three TV stations.
The Leafs and the Raptors are huge revenue earners, but have struggled even to reach the playoffs in recent years.
Rogers Communications owns Canada’s biggest wireless company and operates cable and media businesses. It also owns the Rogers Center in Toronto, home to the Blue Jays.
Shares of Rogers were up 1.5 percent at C$36.82 on the Toronto Stock Exchange shortly after the market opened on Wednesday. BCE was up 0.9 percent at C$35.02.
($1=1.02 Canadian Dollar)
Reporting by John Tilak, Pav Jordan, John McCrank and Frank Pingue. Editing by Janet Guttsman and Peter Galloway
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