Rogers to become sole owner of MLSE, buying remaining stake for $4.35B

william penn adair rogers communication theory says it has in agreement(p) to purchase come out Kilmer Sports Inc. From its 25 per cent stake in Maple Leaf Sports & Entertainment for $4.35 billion, making Rogers the sole owner of the sports conglomerate that includes many Toronto sports teams and venues.

Rogers chief executive Tony Staffieri called it a defining moment for the company.

"It gives us even more opportunity to invest in championship-calibre teams, create unique experiences for customers and fans, and unlock long-term value for shareholders," Staffieri said in a press release.

MLSE owns the Toronto Maple Leafs NHL team as well as the AHL's Toronto Marlies, the Toronto Raptors basketball team, the Toronto FC and the CFL's Toronto Argonauts. It also owns and operates the Scotiabank Arena, and invests in and operates the Coca-Cola Coliseum and BMO Field, all in Toronto.

Rogers previously bought out Bell's 37.5 per cent stake in MLSE, giving them a 75 per cent stake.

Before that, the two companies had previously owned equal stakes in the sports conglomerate, while the remaining quarter was owned by Larry Tanenbaum through his holding company, Kilmer. Rogers held an option allowing it to buy out that remaining 25 per cent stake in MLSE.

Rogers acquires Bell's stake in MLSE for $4.7B

Tanenbaum also owns Toronto's WNBA team, the Toronto Tempo, and in June became one of the PWHL's first outside investors.

Tanenbaum, who currently serves on the MLSE board of directors as chair emeritus, will step down once the deal closes, as will MLSE board member Dale Lastman.

Rogers expects the deal, which is subject to league approvals, to close in the fourth quarter of this year.  It also said it intends to sell a minority stake in the consolidated Rogers sports, media and entertainment assets over the course of the next year.

The deal will give Rogers total control over the suite of teams and venues that MLSE owns. 

On top of that, Rogers also owns the Jays' home stadium Rogers Centre and the television network that broadcasts many sporting events, Sportsnet. The company also has partnerships with the Vancouver Canucks, Edmonton Oilers, Calgary Flames, the NHL, the NBA, MLB and Live Nation.

The company said full ownership will strengthen its ability to drive long-term growth across its businesses.

Jays' Guerrero Jr. Proving his value, Rogers sees revenue boost

"The strategic value of our sports business is even greater when you combine it with our core connectivity business — it gives us a unique value proposition to compete in a very crowded marketplace," Staffieri said.

Rogers also says it will deliver more value for fans, including by expanding affordable options and access to ticket, plus ticket giveaways.

The case for spending $500M on a single Toronto Blue Jay

While some fans might be wary of one company owning so much of Toronto's sporting landscape, founder and president of marketing firm Cosmos Sports Cary Kaplan argues that Rogers already had a monopoly over Toronto sports with its 75 per cent stake.

"Rogers owned the Blue Jays, Raptors, Leafs, Argos and TFC yesterday; they just own them again today," Kaplan said. 

It's also common in the sports world. Kaplan says lots of successful franchises are owned in groups with other teams and venues — take for example how Madison Square Garden's chair James Dolan owns the New York Knicks basketball team and New York Rangers NHL team, among other entertainment assets.

Both Kaplan and sports economist Moshe Lander agree that the deal will probably change nothing for fans — including ticket prices.

"The ticket pricing is based on demand; it's not based on ownership," Lander said. The number of seats in the stadiums or frequency of home games won't change because of the new ownership by Rogers, Lander says, so the switch doesn't change anything in the demand equation.

Where it will impact costs is for advertisers, according to Lander.

While a company looking to advertise with banners in a sports arena, for example, might ordinarily be able to negotiate with a city's pro basketball team, hockey team and baseball team separately to get a better deal, the sale means they're all owned by the same group.

"Rogers now controls Toronto sports. And so if you want to associate yourself with Toronto sports, you have one option and one option only."

Given Rogers was always expected to buy the remaining 25 per cent, former MLSE president and CEO Richard Peddie says he's not surprised by today's announcement — except at how quickly it came together, and the perceived value of the company.

The deal between Rogers and Kilmer implies that the total value of MLSE is more than $17 billion — a "spectacular number" that exceeded Peddie's expectations.

That makes Kilmer's Tanenbaum one of the biggest winners in the sale, Peddie adds. 

In a letter to fans on Monday, Tanenbaum thanked Toronto's sporting community for putting their trust in him as an owner for years.

"I am extremely proud to leave this legacy of excellence, a culture of winning, and a family feeling among all our MLSE employees to be carried on," Tanenbaum wrote in a release.

Despite stepping away from MLSE with this sale, Peddie says he doesn't expect Tanenbaum to retire. Kilmer's recent investments in the women's pro basketball and hockey leagues signal he'll likely continue to invest in this growing part of the sporting world, according to Peddie.

"He's an investor and he's enthusiastic. He's committed to women's sports," Peddie said. "So I think you're going to see that side really flourish because Larry will invest money in it." 

Journalist

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