Rogers is planning to turn its massive sports and media holdings into a single powerhouse company that it values at more than $25 billion CAD.
During the company’s Q1 earnings call on Wednesday, CEO Tony Staffieri explained that Rogers wants to combine teams like the Toronto Blue Jays and Maple Leaf Sports & Entertainment (which includes the Leafs and Raptors) with its Sportsnet media assets. The goal is to create one of the most significant sports and entertainment entities in the world and finally show investors the true value of these assets, he said.
Rogers describes the $25 billion price tag as a conservative estimate based on several factors. The company used public data from Forbes and Sportico to value its pro sports teams and added in the value of its live concert business and the double-digit growth of its Sportsnet+ streaming service. Staffieri noted that sports streaming continues to command a big premium compared to other types of media.
Rogers does not intend to keep the entire new company for itself. Once it finishes buying the final 25 percent of MLSE later this year, it plans to find outside investors to buy a minority stake in the new $25 billion group.
The money from these investors will be used to pay down Rogers’ debt. Staffieri highlighted that while the traditional phone and internet business is currently seeing low growth, sports assets offer long-term growth with much lower equipment and maintenance costs.
The strategy comes as the company’s sports and media division sees some pretty big growth. Revenue for the division shot up 82 percent this past quarter to nearly $1 billion. Executives believe that by grouping all these teams and media brands together, they can reveal billions of dollars in value that the stock market is currently overlooking.
Earlier this week, Rogers also said it was going to cut its wireless network spending by 30% as well. Competition and slower growth is not helping, but this bet on sports looks to be one way it can shed debt.
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