Rogers acquires BCE’s stake in MLSE for C$4.7 billion

TORONTO - Rogers Communications Inc. (TSX:RCI.A and RCI.B) (NYSE:RCI) announced Wednesday it has completed the acquisition of BCE’s 37.5% ownership stake in Maple Leaf Sports & Entertainment (MLSE) for C$4.7 billion.

The transaction, which closed effective July 1 after receiving all necessary regulatory and league approvals, makes Rogers the largest shareholder with a 75% interest in MLSE, the organization that owns major Toronto sports franchises. With annual revenue of $14.37 billion and EBITDA of $6.44 billion in the last twelve months, Rogers demonstrates substantial financial capacity to support this strategic acquisition.

"MLSE is one of the most prestigious sports and entertainment organizations in the world and we’re proud to be the majority owner of these iconic sports teams," said Tony Staffieri, President and CEO of Rogers, in a press release statement.

The purchase was primarily funded through revolving bank credit facilities and cash on hand, according to the company. With total debt of $34.3 billion, investors can access detailed debt sustainability analysis and more financial metrics through InvestingPro’s comprehensive research reports.

This acquisition expands Rogers’ presence in Canadian sports media and ownership. The company already owns the Toronto Blue Jays baseball team, Rogers Centre stadium, and Sportsnet, which it describes as Canada’s leading sports network.

Rogers also maintains strategic partnerships with the NHL through a 12-year agreement for national media rights extending through the 2037-2038 season, as well as partnerships with the Vancouver Canucks, Edmonton Oilers, and Calgary Flames.

The company stated it has invested over $15 billion in Canadian sports over the past decade and plans to continue investing in the teams under its ownership.

MLSE owns several professional sports teams including the Toronto Maple Leafs (NHL), Toronto Raptors (NBA), Toronto FC (MLS), and Toronto Argonauts (CFL), along with various sports venues and properties. Trading at a P/E ratio of 13.57, Rogers presents an interesting investment opportunity. For detailed valuation analysis and expert insights, explore the full Rogers Communications research report on InvestingPro.

In other recent news, Rogers Communications has reported a steady performance in its first quarter of 2023, with service revenue and adjusted EBITDA both increasing by 2% year-over-year. The company’s wireless service revenue also saw a similar 2% rise, driven by subscriber growth, while free cash flow remained stable at $586 million. In a significant development, Blackstone has completed a CDN$7 billion equity investment in a Rogers subsidiary, which maintains Rogers’ operational control while providing substantial capital. Additionally, Rogers has received regulatory approval to acquire Bell’s interest in Toronto Raptors Network Ltd., making it a 75% owner of Maple Leaf Sports & Entertainment (MLSE) with plans to finalize the C$4.7 billion acquisition soon.

Analyst firm BMO Capital has raised its price target for Rogers Communications to C$57.00 from C$55.00, maintaining an Outperform rating on the stock. This adjustment reflects an improved wireless pricing environment and expected modest cable revenue growth for Rogers. The company has also disclosed the results of its recent Annual General Meeting, confirming the re-election of all nominated directors and the approval of its auditors. These developments highlight Rogers Communications’ strategic moves to strengthen its financial position and expand its sports and media assets.

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