December 9, 2011
MLSE sale a done dealBell, Rogers buy Leafs, Raps, TFC
By ROB LONGLEY, QMI Agency
TORONTO - The Toronto Maple Leafs and all its related companies are officially made for TV.
The Ontario Teachers' Pension Plan confirmed Friday morning that it has sold its controlling stake of the Maple Leaf Sports and Entertainment empire to the country's two largest media companies.
A story first reported by QMI Agency on Thursday night was confirmed — that the 79.5% majority stake in the parent company of the Maple Leafs, Raptors, Air Canada Centre and more has been sold to an unlikely partnership of two of Canada's communication giants, Rogers Communication and BCE, the parent company of Bell.
“MLSE is truly a world-class organization with some of the most iconic brands across North America,” Rogers president Nadir Mohamed said. “Sports content is king. Let’s face it nobody wants to watch a game two days later.
“Between the two organizations I can’t think of anybody that can bring live sports to Canadians wherever they are without missing a second.”
At a packed press conference in the Air Canada Centre, Teachers’ said it sold its stake for $1.32 billion, based on an enterprise value of just over $2 billion. The transaction is expected to close in mid-2012 and is subject to league and regulatory approval.
Both Bell and Rogers officials vowed to remain fierce competitors despite the fact they will be co-owners of the parent company of Canada’s most treasured franchise.
Both sides acknowledge that the deal was made possible through the work of Larry Tanenbaum, who upped his own share of MLSE to 25% from the 21.47% he previously owned.
“I am excited to welcome our new partners Bell and Rogers,” Tanenbaum said in a statement. “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.”
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. It is believed that neither company felt it could afford losing out to its competitor, especially given the value of TV rights to the Leafs in this country.
“It’s a rapidly changing, technology driven world and one thing that hasn’t changed is our love for sports in this country,” Bell CEO George Cope said. “We believe that live content is going to be increasingly important.
“It took a lot of time, a lot of work (to get the deal done). We felt it important the company remain in Canadian hands.”
Rogers Media president Keith Pelley told QMI Agency that radio rights will be split between Rogers’ own station and TSN Radio. The current television deals with TSN and Sportsnet are in place through the 2015 season.
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.
News of the sale comes as a surprise given that just two weeks ago, the Ontario Teachers’ Pension Plan had announced MLSE was no longer on the market after eight months of trying to sell.
But executives from both parties got together a week ago and pulled the deal together quickly.
When reached by QMI Agency’s Steve Simmons, a spokesman for NHL commissioner Gary Bettman refused comment.
Of course, any purchase of the Leafs and the Raptors would have to be approved by the NHL and NBA, respectively. Bell also owns 18% of the Montreal Canadiens with naming rights to its arena.
Others say that the early season success of the Leafs and the possibility of big playoff gates in coming years has made MLSE more attractive than ever.
— With files from Steve Simmons, Lance Hornby and Joe Warmington