The Toronto Maple Leafs have some new owners as telecom giants Rogers and Bell Canada are teaming up to buy a majority stake in Canada's biggest sports franchise company, Maple Leaf Sports & Entertainment, for about $1.07 billion.
The two companies, fierce rivals in the business of cellphone and Internet services, said Friday they will each pay current owner the Ontario Teachers' Pension Plan about $533 million for a 37.5 per cent chunk of the sports ownership company.
Through his company Kilmer Sports, minority owner Toronto businessman Larry Tanenbaum will boost his current stake in MLSE by five per cent to 25 per cent, bringing the total value of the company to just shy of $2 billion.
MLSE owns the Leafs of the NHL, the NBA's Toronto Raptors, Major League Soccer's Toronto FC, the Toronto Marlies of the AHL and the Air Canada Centre.
What are they worth?
Value (in millions US) of major teams under MLSE control, according to most recent studies by Forbes:
Maple Leafs (NHL): $521
Raptors (NBA): $399
Toronto FC (MLS): $44*
*2008 value. All others 2011.
The deal helps slake the telecom giants' thirst for sports content to broadcast on screens of all sizes. The two rivals have put their differences aside before, teaming up to form a media consortium that brought viewers the 2010 Vancouver Olympics on Rogers Sportsnet channels and Bell-owned CTV and TSN.
"What this really brings to the fans is access to the four professional teams in a way quite frankly none of us thought possible 36 months ago," George Cope, president and CEO of Bell Canada parent BCE Inc. (TSX:BCE), said at a news conference.
"The Canadian telecom industry, wireless industry, leads the world in technology. Making that available to everyone in every market we think will be one of the huge benefits to the fans and quite frankly to the NHL, and the other sports organizations."
The heads of both Rogers and Bell declared the deal a victory for sports fans and one that will keep the company in Canadian hands.
"This is a perfect fit for Bell from a strategic perspective" as it dovetails nicely with the company's acquisition last year of the CTV television network and its TSN sports channel, Cope added.
Rogers already owns the Toronto Blue Jays baseball team and their stadium, the Rogers Centre, as well as the broadcaster Sportsnet.
More and more Canadians want to watch live sports on wireless devices when they're on the go, and MLSE offers some of the richest, most sought-after content in North America, said Rogers chief executive Nadir Mohamed.
"This investment will secure us access to this iconic brand and content It will keep ownership of MLSE in Canadian hands and that's an important point. It will substantially bolster Sportsnet and will complement our existing world-class portfolio of sports properties."
The surprise deal, worth about $1.32 billion, came a few weeks after Teachers' announced it had given up trying to sell the stake in sports company, which it bought 17 years ago for $180 million.
Shortly after that, Bell and Rogers (TSX:RCI.B) stepped forward with a bid that met all of its original terms and conditions, Teachers' said.
"We are proud of this iconic company, in which we first invested in 1994," Jane Rowe, senior vice-president of Teachers' Private Capital said in a statement.
"It is second to none in the industry and has a very bright future. We believe that Bell and Rogers, with their MLSE partner Kilmer Sports, will deliver on the company's potential."
"We will continue to cheer for the teams and look forward to celebrating their success, but after the summer, from the sidelines," she added later at a news conference.
Tanenbaum will remain as chairman of MLSE and as a governor of the NHL, the NBA and Major League Soccer.
"I am proud this is a made-in-Canada deal that will bring resources and expertise to help us win on and off the ice, court and pitch," Tanenbaum said.
"This is a terrific path forward for our teams and our fans. It will ensure MLSE continues to make a positive impact in Toronto and across this great country of ours."