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Report: Rogers telecom in talks to buy Raptors

Posted on: December 1, 2010 8:56 am
Edited on: August 14, 2011 9:10 pm
Rogers is in talks to purchase a majority stake in Maple Leaf Sports and Entertainment from the Ontario Teachers' Pension Plan, giving thetoronto-raptors telecommunications giant control of the NHL's Toronto Maple Leafs and NBA's Toronto Raptors. Posted by Ben Golliver Fair warning: this post is about Canada. It's also about a potential $1 billion professional sports transaction, so you should keep reading. Rogers is a giant company in Canada, a wireless, phone, television and internet provider akin to Comcast or AT&T in the United States. The company owns Major League Baseball's Toronto Blue Jays and, according to the Toronto Star, is making a major, major offer to essentially monopolize professional sports in Toronto by buying a majority stake in the National Hockey League's Toronto Maple Leafs, the National Basketball Association's Toronto Raptors and Major League Soccer's Toronto FC.
In what would be the biggest transaction in Canadian sport history, Rogers is in talks to buy the Toronto Maple Leafs in a deal worth more than $1 billion, sources said Tuesday.
The sale would include the Raptors, Toronto FC soccer club and the Marlies, the Maple Leafs’ minor league hockey team.
Buying a majority stake in Maple Leafs Sports and Entertainment from the Ontario Teachers’ Pension Plan would transform Rogers, which already owns the Toronto Blue Jays, into one of the most powerful sports enterprises in North America.

The Star also reports the deal would include the television stations that broadcast both the Maple Leafs and the Raptors and could potentially lead to the formation of a regional sports television network.

What are the first-glance implications of this deal? 

For starters, it would give the Raptors a steady, wealthy ownership group invested in keeping the Raptors in Toronto. While the organization has one of the league's most dedicated fanbases and rarely comes up in the discussion of possible franchise relocation anymore, that's a nice peace of mind. Of course, the consolidation and resulting lack of competition could come with a price tag attached, in the form of higher ticket prices and/or content delivery charges.

More importantly for the NBA as a whole, though, is the reported $1.3 billion offer, which is a huge number. Any way you divvy it up between the franchises included in that purchase price, the figure represents a strong valuation for the Raptors. For comparison, Forbes valued the Raptors at $386 million dollars in December 2009. Forbes also ranked the Maple Leafs as the most valuable NHL franchise in Nov. 2009, at $470 million. In other words, Rogers isn't getting a group discount by buying the entire lot, and is almost certainly paying a significant premium above Forbes' valuation for the Raptors. 

This is an important point, because it serves as a reflection of the perceived economic strength of the NBA. In ongoing labor negotiations, the owners have argued that the league needs to retool its broken business model. It's a bit harder to make that argument when a major corporate buyer is lining up to pay huge money simply for the right to participate in that broken business model.

Category: NBA

Since: Sep 24, 2006
Posted on: December 1, 2010 9:53 am

Report: Rogers telecom in talks to buy Raptors

Hey great story, but um, who the f*ck is Rogers?

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