Rogers Bets Big on Sports as Ottawa Invests $400M in Teck Resources
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What is the main topic discussed in this episode?
Investing is simple, but don't confuse that with thinking it's easy. A stock is not just a ticker. At the end of the day, you have to remember that it's a business.
Just my reminder to people who own cyclicals, don't be surprised when there's a cycle.
If there's uncertainty in the markets, there's going to be some great opportunities for investors.
This has to be one of the biggest quarters I've seen from this company in quite some time.
Welcome back to the Canadian Investor Podcast. I'm back with Dan Kent. We are back from vacation, even though you may not have noticed because we did a lot of content beforehand. But it's been a bit slower on the news and earnings front. I think it'll start picking up next week. But we still have some fun stuff to talk about. So the first on the slate, Rogers, to essentially unlock own 100% of MLSC. So they'll be buying the rest of the state that they did not have into that. We'll talk about the Canadian government investing in tech resources. That's an interesting twist and kind of follows what we've been saying for quite some time about the Canadian government and the Canada Strong Fund. And there's also the Canada Critical Mineral Accelerator
All of these things kind of working together for more emphasis and on national security. So we'll talk a little bit about this. We'll talk about some layoffs that were announced by Microsoft, then a mini tender offer and solicited mini tender offer for Sun Life. So make sure you listen to that if you are a Sun Life shareholder, although. I think it'll be helpful for a lot of Canadian investor because these are more common than people might think. MicroStrategy selling Bitcoin. A little bit of trouble with MicroStrategy. We'll talk about that. And we'll finish with Nike earnings. So should be a fun one ahead. So, Dan. Let's get started here with Rodgers to own 100% of MLSC. So this is a big piece of news for a Toronto sports fan, but I'd say like sports fans in Canada just as a whole, it kind of continues to what they had built on quite recently.
I think a couple of years ago when they bought the BCE stake. So back then, Rogers agreed to buy BCE's 37.5% stake for $4.7 billion, which valued the team at $12.5 billion. Well, on Monday, July 6th, Rogers announced it will be buying the remaining 25% stake it did not own in MLSC. from kilmer sports which is by i think it's owned by tannenbaum right so kilmer sports for 4.35 billion canadian these are all numbers in canadian dollars that implies a 17.4 billion valuation for mlsc so that includes the leaves the marlies the raptors toronto fc the argonauts so definitely a good a really strong portfolio of, well, Toronto-based team, but obviously Toronto being the largest city in Canada, these are pretty highly valued assets.
And the price that they are paying represents a 39% increase in the value of MLSC in less than two years versus the price that they paid for BCE. Because what they agreed to pay for BCE BCE stake was in September 2024. The transaction closed a bit later, but still. So you have less than two year time frame, 39% increase. Pretty wild. And I remember at the time we talked about it and some BCE bulls said that BCE bulls said that it was smart because MLSC wasn't really producing cash flow and was just sitting as an investment on their balance sheet. And Since it was a minority investment, that's not exactly wrong, but I think what they were missing is just a scarcity of professional sports league. These leagues are closed clubs and even though they do not tend to, they tend to expand, so do some expansions over time.
They don't happen very often. And these teams also do not come up for sale very often. So there are scarce resources. And make sure you tune in for our Monday episode because we actually have a full segment. We'll look in since 2012, the price increases between essentially for the big four leagues in North America.
Why is Rogers buying the remaining stake in MLSE and what does the $17.4B valuation mean?
NHL, MLB, NBA, and NFL, and just see whether they're good investments or not. So make sure you tune in for that.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:01–4:30
2
Why is Rogers buying the remaining stake in MLSE and what does the $17.4B valuation mean?
4:30–17:30
3
How does scarcity drive sports franchise valuations and recent expansion fees?
17:30–34:00
4
What are the financial trade-offs for Rogers owning MLSE amid high leverage?
34:00–45:01
Speakers
3 identifiedMore from The Canadian Investor
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