There’s now a single phone number to call with all of your complaints about Toronto sports.
What happened: Rogers is paying $4.35 billion for the remaining 25% stake in Maple Leaf Sports & Entertainment (MLSE), a deal that will consolidate almost all of Toronto’s pro sports properties and form one of the world’s largest sports and entertainment companies.
Kilmer Sports owner Larry Tanenbaum sold the stake to Rogers at a 39% premium compared to the valuation Bell sold its stake at two years ago. MLSE is now valued at ~$17.4 billion.
Catch-up: Once the deal closes, Rogers will be the sole owner of the Toronto Raptors, Toronto Maple Leafs, Toronto Blue Jays, Toronto FC, Toronto Argonauts, Sportsnet, and a host of other assets, including Toronto’s Scotiabank Arena and Rogers Centre.
Why it matters: Rogers’ next move is to sell a minority stake to private investors, a trend that has taken over pro sports in recent years (over two-thirds of NBA teams and one-third of MLB teams are backed by private equity). For Canadian sports fans who care more about their favourite team winning than the profit margins of ownership, that could be bad news.
A recent investigation into Fenway Sports Group (FSG) showed how PE money can change the way teams are run — prioritizing cost-cutting and treating players like balance sheet assets to be flipped.
That FSG model has (unfortunately) proven that as long as fans keep showing up, a losing team that’s cheap is more profitable than an expensive one that wins.
Our take: Given how much cash Rogers splashed to take control of MLSE, it seems inevitable that we’re gonna see some price hikes for tickets, merch, Sportsnet subscriptions, and anything else it can slap a Toronto sports logo on.—LA
