The unlikely partnership behind MLSE deal

Rivals Bell and Rogers brought together by instinct for self-preservation

by Jonathon Gatehouse

Content has long been King. But in the wake of the joint Rogers Communications/BCE takeover of Maple Leaf Sports and Entertainment, it has been upgraded to Emperor, if not Supreme Galactic Ruler. How else does one explain two of Canada’s fiercest business rivals coming together to pay an astounding $1.32 billion for the Ontario Teachers’ Pension Plan’s 79.53 per cent share of the company that owns the NHL’s Maple Leafs, NBA’s Raptors, major league soccer’s Toronto FC, the minor league Toronto Marlies hockey club, and the Air Canada Centre?

It is a premium price, for what the rival communications giants and broadcasters—Rogers owns Sportsnet, and Bell TSN—believe is a premium TV product. And the driving force for the surprise deal was clearly self-preservation.

When the Ontario Teacher’s Pension Plan let it be known that they were willing to sell their 80 per cent stake in MLSE last spring, (purchased 17 years ago for $180 million) it was obvious that it would take very deep pockets indeed to seal the bargain. Both Rogers and Bell kicked the tires, fearing the other was motivated to buy. Regional TV rights for the Toronto Maple Leafs—a team that attracts viewers and advertisers like no other in Canada—currently split between the two sports networks were to come up for renegotiation in 2015. The national broadcast rights, shared between TSN and CBC, are up for grabs in 2014. In Canada, any sports channel without NHL hockey—and more specifically the Leafs—wouldn’t last for long. And in wedding themselves in MLSE ownership, BCE and Rogers have gained perpetual access to the most sought-after content in the land.

Nadir Mohamed, President and CEO of Rogers Communications (which also owns Maclean’s) called MLSE “a Canadian treasure that fans are absolutely passionate about.” The company plans to leverage the acquisition onto five sports platforms—TV, radio, digital, mobile devices, and print, with the new Sportsnet magazine. “It’s the perfect marriage of content and distribution,” said Mohamed.

George Cope, President and CEO Bell Canada Enterprises, said the deal keeps key Canadian sports franchises in Canadian hands. “In our rapidly changing, technologically driven world, the one thing that hasn’t changed is our love for sports.” Fans, he added, will now be able to enjoy unparalleled access to these teams.

How it happened exactly is still shrouded in mystery. It was just two weeks ago that Teachers’ announced it was taking MLSE off the market two weeks, having failed to find anyone to meet its price and conditions. Bell and Rogers had teamed up before, sharing the rights for the Vancouver 2010 Winter Games, and this summer’s London Olympics. But it seems it was MLSE’s minority owner, Larry Tanenbaum, who brought the competitors back to the table, together. (As part of the deal Tanenbaum will acquire an additional five per cent interest, giving him a quarter of the operation. And he will remain MLSE’s public face, serving as chairman and NHL governor.)

What it means to fans is also unclear. Both Mohamed and Cope said they are committed to building winning franchises, but neither promised long-suffering Toronto partisans a championship.

The strongest competition may remain in the respective corporate boardrooms. Mohamed used the news conference to trumpet the Sportsnet brand, even working in a plug for his new magazine. And for his part, Cope was also unwilling to cede any ground. Asked who picked up the phone and made the first call, he demurred. “We both called each other immediately, at the same time.”




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The unlikely partnership behind MLSE deal

  1. Bad news for cell phone, cable and internet prices, now that Bell and Rogers are in bed together.

  2. Man were they scarred into action after the threat of MLSE starting their own network. Imagine TSN and Sportsnet with no access to Leafs games. Whoever ran negotiations for MLSE well played.

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