Pedestrians pass MLSE headquarters in Toronto.Chris Young/The Canadian Press
Rogers Communications Inc. RCI-B-T has signed an agreement to buy the remaining 25-per-cent stake in Maple Leaf Sports & Entertainment from Kilmer Sports Inc. for $4.35-billion, giving it full control over Toronto’s top sports teams and bringing it one step closer to its minority sale strategy.
Through the deal, Rogers now owns the entirety of the Toronto Maple Leafs, Toronto Raptors, Toronto FC and Toronto Argonauts, adding them to its existing sports holdings which include the Toronto Blue Jays, the Rogers Centre and Sportsnet.
The deal price reflects an MLSE valuation that is more than a third higher than what was implied when Rogers bought out another major stake last year, a reflection of the rapidly growing value of sports assets, analysts said.
“This is a defining moment for Rogers,” said Rogers president and chief executive officer Tony Staffieri in a release Monday morning.
The transaction is subject to league approvals and is expected to close in the fourth quarter of 2026. Rogers said it intends to finance the transaction with “committed liquidity,” and reiterated plans to sell a minority stake in the consolidated sports, media and entertainment assets over the course of the next year.
As of the end of March, Rogers had $6-billion in available liquidity, including $1.4-billion in cash and cash equivalents and $4.6-billion under bank and other credit facilities, executives said on a call with analysts.
Credit facilities are pre-approved sums of money that lenders agree to let companies borrow. According to sources, Rogers had put the credit facility in place to ensure it has the funds to buy out the remaining MLSE stake.
The Globe and Mail is not identifying the sources because they were not authorized to speak publicly about the matter.
Moody’s, S&P and Morningstar DBRS all currently place the company’s senior unsecured notes one level above non-investment grade, or junk.
In April, DBRS Morningstar analyst Scott Rattee confirmed a positive outlook for Rogers in light of the upcoming sports transactions. Speaking Monday, he said this confirmation comes with the expectation of another review in one year – in April, 2027 – at which point the agency would have visibility on the monetization.
Moody’s and S&P have rated Rogers’s outlook as stable and negative, respectively.
Monday’s sports deal implies a total equity value for MLSE of $17.4-billion, according to Bank of Nova Scotia analyst Maher Yaghi in a note to investors.
That represents about a 39-per-cent step-up from the valuation of approximately $12.5-billion implied when Rogers purchased Bell Canada parent BCE Inc. BCE-T’s 37.5-per-cent stake last year, he said.
Rogers executives have previously said they believe the combined sports assets are worth more than $25-billion.
Rogers signals it may wait to acquire final MLSE stake before seeking outside investors
TD Cowan analyst Vince Valentini said the company’s share price had been “weak” recently on concerns about a delayed deal between Rogers and Kilmer. Monday’s announcement should trigger a “relief rally,” he said in a note to investors. Rogers shares were up 2 per cent on the Toronto Stock Exchange Monday morning.
Should Rogers sell a minority stake of between 20 and 30 per cent of its sports assets and undertake other initiatives, such as securitizing bank receivables and reducing its capital expenditures, the company will be “firmly on the path” to reducing leverage and “de-risking” the balance sheet, said RBC Dominion Securities Inc. analyst Drew McReynolds in a note.
In an open letter, Kilmer owner Larry Tanenbaum thanked fans for their confidence in his leadership. Mr. Tanenbaum’s sports investment journey first began 30 years ago with a small stake in the Toronto Maple Leafs.
“As I step back as an owner, as contemplated by a shareholders agreement entered into 15 years ago, I am extremely proud to leave this legacy of excellence, a culture of winning, and a family feeling among all our MLSE employees to be carried on,” he said.
“Now, I look forward to joining you all as a lifelong fan. See you at the games.”
With a report from Andrew Willis