Rogers & Bell Buy TFC
The rumours have been circulating for months and Friday they finally came to something. The Ontario Teachers Pension Fund, majority owner of Maple Leaf Sports & Entertainment have decided to sell their majority share in the holding company that owns Toronto FC to broadcast/telecom rivals Rogers and BCE.
Here are the high level details:
- Rogers and Bell will split the Teacher’s majority ownership stake 37.5%/37.5%.
- 1.32 billion is the reported cost for Rogers and Bell to get the Teacher’s out of the MLSE boardroom.
- Mid 2012 is when the deal closes subject to Federal Government regulatory approval.
- Chairman Larry Tannenbaum stays put, and actually increases his ownership stake to 25%.
So what does this change mean to Toronto FC and how will this change of ownership impact the long term future of the club? Well on first blush I don’t think this change means much of anything in the near to medium term. This deal today is about Hockey, the Maple Leafs and the two major telecom and broadcast entities in the country finding a way to work together. TFC is not the driving force here. Neither are the Raptors, GOL TV/Raptors TV/Leafs TV, the Marlies, or the ACC. This deal is all about Bell and Rogers having hockey content for their respective sports properties like Sportsnet and TSN and also for things like programming people might want to pay for on smartphones and tablets in future years.
Me thinks that this two headed broadcast/telecom juggernaut might finally put the boots to CBC and Hockey Night in Canada when the national rights come up for sale again in the next few years. But I digress. This is a TFC blog after all…
In the age of Bittorrent, PVR’s and streaming, sport is one of the last broadcast properties that can draw in people to a live event and that is of course likely the driving force for two competitors like Rogers and Bell (who both own the channels the games are on and the pipes that deliver them to their customers) to climb into bed together.
TFC is chump change in a deal worth well over a billion dollars. Let’s not kid ourselves here. But what TFC probably represents to the MLSE business and their new owners is a well run piece of the company that is profitable and exists in a league that has cost certainty to a large degree. The Academy will be finished soon. There are no major fiscal outlays that probably need to be made going forward for TFC so even though they might be a bit of an afterthought in this deal I don’t foresee much change. TFC is cheap programming relatively speaking and there is a possible growth curve there both in Toronto and nationwide.
One question I would like to know about is what the future plans for GOL TV are. Will Rogers and Bell give GOL better positions on the dial? Will they perhaps put more of a TFC focus on the channel the way Leafs TV and Raptors TV do for their clubs? Or is GOL TV toast? We will of course all have to wait and see. The other small question is now that Rogers owns a piece of the business does this mean that the Champions League game versus Los Angeles in March is now likely to take place at the Rogers Centre?
My good friend over at the 24th Minute Duane Rollins wrote today that TFC fans might rue the day that this sale took place considering that the old management structure was the devil you know and the new one is the devil you don’t. He might me right. He postulated that this deal could just be about the Leafs at the end of the day and that perhaps as a way to pay for this deal they might divest themselves of everything but the Leafs down the road. I guess we will have to see how the heartless corporate overlords will run things in the future.
But no matter what happens to TFC within the MLSE corporate structure or outside, I am not terribly worried about the immediate future of the club. The Stadium is there. The Academy facility is getting close to being ready. The team is profitable and TFC is from a business perspective, a few hiccups aside over the past five seasons, a business with an outlook for real growth. Publicly traded companies need growth in their investments. TFC is one of those pieces that as part of MLSE can offer some growth down the road.