{"id":927992,"date":"2026-10-10T17:02:12","date_gmt":"2026-10-10T17:02:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/927992\/"},"modified":"2026-10-10T17:02:12","modified_gmt":"2026-10-10T17:02:12","slug":"will-betting-big-on-sports-pay-off-for-rogers-communications","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/927992\/","title":{"rendered":"Will betting big on sports pay off for Rogers Communications?"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Charles McAdoo rounds the bases after homering for the Toronto Blue Jays at Rogers Centre. Rogers will combine all of its sports holdings, including the baseball team and the ballpark, into Rogers Sports.Nick Turchiaro\/Reuters<\/p>\n

After years of planning and billions in spending, Rogers Communications Inc. RCI-B-T<\/a> is in the final inning of its latest big move into sports \u2013 and Bay Street is watching closely. <\/p>\n

Rogers this month closed its $4.35-billion deal with Kilmer Sports Inc. to purchase its stake in Maple Leaf Sports & Entertainment. That gives the telecom giant full ownership of MLSE\u2019s four major sports teams \u2013 the Toronto Maple Leafs, Toronto Raptors, Toronto FC and the Toronto Argonauts \u2013 and Scotiabank Arena. <\/p>\n

Rogers will combine all of its sports holdings, including the Toronto Blue Jays, the Rogers Centre and Sportsnet, into Rogers Sports, cementing the company\u2019s status as one of North America\u2019s biggest sports empires. <\/p>\n

Now Rogers is turning to its next move: a plan to sell a minority stake in the combined collection. The company is hoping the sale will persuade investors to ascribe a higher value to its sports assets, which it believes investors have long overlooked. <\/p>\n

It\u2019s part of a broader strategy to support the core business amid slow telecom growth, and boost the company\u2019s share price.<\/p>\n

In 2021, Rogers announced the acquisition of Shaw Communications for $20-billion. Later it bought out Bell Canada parent BCE Inc.\u2019s MLSE stake for $4.7-billion, and struck an $11-billion renewed deal for NHL broadcast rights in Canada. <\/p>\n

Over the past five years, Rogers shares, at $42.46 at Friday\u2019s close, are down more than 28 per cent. Other telecom stocks have suffered as well, as the industry faces numerous headwinds.<\/p>\n

One concern for Rogers is whether the revenue from its sports businesses can translate into substantial cash flow. Another is Rogers\u2019s mountain of long-term debt \u2013 $40-billion at last report \u2013 and the possibility of a credit rating downgrade to junk status if the company can\u2019t satisfy credit raters with the minority stake sale. <\/p>\n

Cathal Kelly: Watching the top contenders locked in a struggle to run Rogers Sports is going to be fun<\/a><\/p>\n

In an interview a few days after closing the final MLSE purchase, Rogers CEO Tony Staffieri was optimistic. <\/p>\n

\u201cWe think it\u2019s going to be a game changer and a real value differentiator for us in the Canadian landscape,\u201d he said of the combined sports assets. <\/p>\n

\u201cOur job is to execute on our strategy and on our vision,\u201d Mr. Staffieri said. As for the return for investors: \u201cIt\u2019s going to be for the market to decide.\u201d<\/p>\n

Mr. Staffieri sees the expenditures of the past few years less as a transition and more as the fulfilment of a vision that Rogers has been building toward for years. \u201cWe\u2019ve been sports and entertainment participants and owners for a long while,\u201d he said. \u201cWe\u2019ve owned the Jays since the early 2000s. Sportsnet was created in the 90s.\u201d <\/p>\n

Now that Rogers has completed its final acquisition of MLSE, the company said it plans to complete a thorough review and build the best operating model for Rogers Sports.<\/p>\n

But first, Rogers must sell a minority stake and use the proceeds to pay down debt. The company says it believes the business is worth more than $25-billion, and plans to offer as much as 30 per cent to suitors. Much is hanging on the company\u2019s ability to execute a favourable sale of a stake: namely, the company\u2019s investment-grade credit rating.<\/p>\n

Rogers\u2019s senior unsecured debt is rated just one notch above noninvestment grade by all three major rating agencies. Already, some of the company\u2019s recent subordinated debt has speculative-level ratings.<\/p>\n

If several credit raters were to lower their rating for Rogers, its borrowing costs could increase and financing options could shrink, a greater challenge now that global interest rates have risen. <\/p>\n

Open this photo in gallery:<\/a><\/p>\n

CEO Tony Staffieri, shown in Toronto this week, sees the expenditures of the past few years as the fulfilment of a vision that Rogers has been building toward.Cole Burston\/The Globe and Mail<\/p>\n

In late September, S&P warned it could downgrade the company\u2019s debt rating next year if it fails to lower its leverage below an S&P Global Ratings-adjusted leverage ratio of four times debt to earnings before interest, taxes, depreciation and amortization (EBITDA), or if the company pursues other investments without first reducing leverage. S&P expects Rogers to end 2026 with a ratio of 4.6. <\/p>\n

Rogers\u2019s executives are confident that they will be able to meet these targets, through a combination of the minority stake sale and other measures, including a commitment to lower capital expenditures this year by 30 per cent and plans to securitize Rogers Bank assets.<\/p>\n

Mr. Staffieri said he expects Rogers will reach leverage of between 3 and 3.5 times debt to EBITDA within the next 12 months, indexing \u201ctowards the lower end of that.\u201d <\/p>\n

\u201cWe\u2019re feeling very good, very optimistic and very confident about our ability to deliver that,\u201d he said.<\/p>\n

Many Bay Street analysts agree the company will raise adequate funds from the sale to reduce debt, with some estimating proceeds of as much as $7.5-billion, given the rarity of the assets, the appreciating valuations on sports teams and Rogers\u2019s lucrative sports rights holdings.<\/p>\n

Analysts have noted that a series of sports teams have sold for far more than expected, and suggested that Rogers\u2019s assets too could rake in a premium price from a growing number of asset-hungry global billionaires and private equity funds. <\/p>\n

No NHL games on free Canadian TV? This group thinks there should be a law against that<\/a><\/p>\n

The sale could also give the company\u2019s share price a boost. <\/p>\n

\u201cIs Rogers getting proper credit for the sports assets within its current share price? The answer is a resounding no, in our view,\u201d said TD Securities analyst Vince Valentini in an October note to investors. <\/p>\n

Mr. Valentini believes there is $7.5-billion of potential hidden value within Rogers\u2019s enterprise value not reflected in the current share price \u2013 which he said works out to approximately $13 a share.<\/p>\n

Cormark ATB analyst David McFadgen agrees the stock is currently \u201csignificantly mispriced.\u201d He has a $74 target for the stock.<\/p>\n

However, others have expressed reservations. <\/p>\n

Veritas Investment Research analyst Liam Gallagher said he believes Rogers will be able to raise what it needs to pay down debt, but noted that any potential buyer knows Rogers has to sell a piece of its sports portfolio. \u201cI don\u2019t think that gives them the best negotiating leverage at the table,\u201d he said.<\/p>\n

The situation highlights a trade-off: Rogers borrowed heavily to buy growth assets but must now sell stakes in them to pay off debt, giving up a portion of future earnings in the process. <\/p>\n

And some investors are focused on the fundamentals of the sports business, as opposed to their resale value.<\/p>\n

\u201cOur concern is not the quality of the assets, but the cash-flow profile,\u201d said Rebecca Teltscher, a portfolio manager for Newhaven Asset Management Inc., a Toronto investment management firm.<\/p>\n

The combined sports assets \u201cdo not generate meaningful free cash flow\u201d after various expenses, meaning the investment case depends on Rogers\u2019 ability to convert that value into cash through future minority sales of the assets, she said.<\/p>\n

\u201cAs conservative, income-focused investors, we prefer investments where returns are supported by current cash generation rather than dependent on future appreciation in asset values, which we view as inherently less certain,\u201d Ms. Teltscher said. <\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Rogers is now the full owner of MLSE’s four major teams \u2013 the Toronto Maple Leafs, Toronto Raptors, Toronto FC and the Toronto Argonauts \u2013 and Scotiabank Arena.Frank Gunn\/The Canadian Press<\/p>\n

When asked about these cash-flow generation concerns, Mr. Staffieri said the model for valuing sports and entertainment industry assets is different from what investors might be used to when assessing telecom companies. Sports team valuations must be taken into account, he said. <\/p>\n

He added that the company\u2019s Sportsnet and concert businesses produce \u201ca significant amount of cash.\u201d \u201cInvestors haven\u2019t been privy to seeing the details of that,\u201d he said. \u201cOur vision is to be transparent in our disclosures about how each of those businesses are doing.\u201d<\/p>\n

Mr. Gallagher at Veritas said the market may hesitate to change the way it values the company\u2019s stock, given that sports \u2013 even when including the entirety of MLSE \u2013 will make up a small portion of the company\u2019s overall EBITDA.<\/p>\n

In 2025, the Rogers Sports and Media segment \u2013 which included MLSE results for July onward \u2013 reported adjusted EBITDA of $241-million, representing a margin of 7.3 per cent. Rogers as a whole generated adjusted EBITDA of $9.8-billion, with a margin of 45.2 per cent.<\/p>\n

Holding the assets, however, could give Rogers more options down the road to trim its stake to pay down debt, pay out special dividends or buy back stock, Mr. Gallagher said. <\/p>\n

\u201cWill this deal be accretive to Rogers shareholders? I\u2019m more skeptical. I would say more value neutral,\u201d he said.<\/p>\n

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For Rogers, building a vertically integrated sports and entertainment empire brings opportunities to help buoy growth and customer retention in the telecom side of the business, a philosophy known internally as \u201cone Rogers.\u201d<\/p>\n

As Mr. Staffieri describes, it\u2019s a strategy built around the idea that the sum of the parts is worth more than each one individually. <\/p>\n

He pointed to a recent success: Rogers customers are being given advanced access to Backstreet Boys concert tickets, something the company can offer because it owns the stadium they will perform in. <\/p>\n

Having more touch points will help the company understand consumers and leverage customer data \u201cto the benefit of our customers and to the benefit of Canadians,\u201d he said. <\/p>\n

Consolidating the sports assets will also allow Rogers to differentiate itself from competitors, he said. <\/p>\n

For Canadian telecoms, finding new avenues for growth has become even more important in recent years, as federal immigration policies have essentially turned off the tap of new potential customers entering Canada, and as wireless prices have fallen, in particular after Quebecor Inc. acquired Freedom Mobile as part of Rogers\u2019s acquisition of Shaw. <\/p>\n

In recent years, Canada\u2019s largest three telecom companies \u2013 Rogers, Bell and Telus Corp. \u2013 have invested billions in new areas amid slow telecom growth, with Telus and Bell both spending on artificial intelligence data centres and Bell expanding into the U.S.<\/p>\n

Telus tightens focus to data centres and core business<\/a><\/p>\n

Rogers\u2019s focus on live sports, meanwhile, reflects what is now a reality about traditional media businesses. \u201cAdvertisers will only pay these days for live programming,\u201d said Moshe Lander, a senior lecturer in economics at Concordia University. Rogers\u2019s assets, he said, \u201cwill allow them to charge top dollar.\u201d<\/p>\n

The company\u2019s sports strategy is part of an effort to invest in higher-growth opportunities, while making its core business more efficient. <\/p>\n

One result has been a series of work-force reductions that significantly reduced head count, including through layoffs and voluntary-departure offers. <\/p>\n

More than 3,000 Rogers or former Shaw employees had their jobs cut or left the company<\/a> in 2023, the year the merger was completed, company disclosures suggest. Its work force shrank by a further 2,000 jobs<\/a> in 2024. While Rogers reported 1,000 more employees<\/a> last year, that increase reflects the addition of approximately 3,000 MLSE employees after Rogers became the majority owner and began including them in financial reporting. <\/p>\n

Meanwhile, Rogers has replaced some in-house jobs with contracted roles, according to Corey Mandryk, lead organizer for United Steelworkers Local 1944. He said this has created job security concerns among some non-unionized staff who have contacted him and say they \u201care getting more and more fearful that their department or their job is next.\u201d <\/p>\n

When asked about the work-force contraction, Mr. Staffieri said the company is always looking to \u201cdeliver more while continuing to bring prices down.\u201d<\/p>\n

\u201cWe operate in a very competitive environment, and so we continually look for ways to bring the product, the service, to customers as efficiently as possible,\u201d including by incorporating AI tools \u201cas quickly as possible,\u201d he said.<\/p>\n

Another area that has recently seen some changes is within the company\u2019s traditional media holdings.<\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Rogers closed down several radio stations in July, including Vancouver’s Sportsnet 650.DARRYL DYCK\/The Canadian Press<\/p>\n

Rogers said that its legacy media assets would remain an important part of its plan, and would be combined into the new business unit that includes its sports assets.<\/p>\n

But amid a difficult advertising market, Rogers has cut some of its radio stations, which it said were experiencing declining audience and revenue trends.<\/p>\n

On July 7, the day after it announced its deal to buy Kilmer\u2019s stake in MLSE, Rogers closed down six stations in four markets, two of which were sports broadcast channels \u2013 Sportsnet 650 in Vancouver and Sportsnet 960 in Calgary \u2013 and said it was laying off 230 people. (The closely coinciding timing was the result of the Kilmer deal being agreed sooner than expected.)<\/p>\n

The stations affected included CityNews 1130 in Vancouver, where reporter Raynaldo Suarez had spent the past five years, and 660News in Calgary, where Mr. Suarez started his career.<\/p>\n

\u201cI was reporting that day on the last FIFA World Cup match that Vancouver was hosting,\u201d Mr. Suarez said. When he tuned in to his station that morning, however, \u201cthe on-air frequency was dead. There was just static.\u201d<\/p>\n

Soon after, he joined a virtual meeting and learned that his station had been shut down. \u201cPeople were just quiet,\u201d he said. \u201cWe all went for breakfast right after. Because what else can you do?\u201d<\/p>\n

Mr. Staffieri said the company will keep moving resources and people to areas of the business that are expanding. <\/p>\n

\u201cNet-net, we continue to be a growing company, and we look for opportunities for our employees,\u201d he said. <\/p>\n

\u201cYou should expect us to continue to adapt, always, to what the market is telling us.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Charles McAdoo rounds the bases after homering for the Toronto Blue Jays at…\n","protected":false},"author":2,"featured_media":927993,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-927992","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/927992","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=927992"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/927992\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/927993"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=927992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=927992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=927992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}