By Ahmad Hathout
Rogers executives said Wednesday that the cable giant has been getting “substantial interest” from institutional investors about a stake in Maple Leaf Sports and Entertainment (MLSE).
“We’re in discussions with folks who are interested in the assets we own and are soon to acquire,” Rogers CFO Glenn Brandt said during the company’s first quarter earnings conference call with analysts. “It’s premature for me to start speculating on when that might result in a transaction. I would say we are engaged in those conversations in earnest. We are more aware than the market is reflecting right now of the value of those assets on our balance sheet.
“We will explore those opportunities with a very open mind.”
Brandt noted that anything concrete will happen only after the company closes its purchase of Bell’s 37.5 per cent stake in MLSE, which Rogers estimates would make its total 75 per cent stake worth some $15 billion (CAD) – putting it among the most valuable sports empires in the world.
Rogers agreed to buy Bell’s stake in September and got Competition Bureau clearance in December. Rogers expects the deal to close by the middle of this year as it makes its way through the sports leagues and CRTC approvals.
“The multi-billion-dollar value of our world class sports assets is not reflected in our share price and our priority is to change this,” Rogers CEO Tony Staffieri said on the call Wednesday, noting that the company went out and secured the rights to broadcast NHL games through to the 2037/38 season for $11 billion – what he called the most valuable media rights in the country.
“The first deal was profitable and successful for Rogers and Sportsnet,” Staffieri said of the previous 12-year deal signed in 2013.
“Our sports assets are unrivaled in Canada and our sports portfolio is one of the best in the world,” Staffieri added. “Sports assets continue to appreciate significantly in value and that’s why investors remain very interested in holding a minority position in these appreciating assets. We continue to meet with external investors who recognize the opportunity with our sports portfolio.”
While the cable giant has been on a buying binge to bolster its core portfolios over the past couple of years, it has also been seeking to leverage existing assets to pay down its debt.
Earlier this month, it finalized an agreement to sell for $7 billion a 49.9 per cent stake in a portion of its wireless traffic transport infrastructure through a subsidiary for that purpose. It has, in the past, also offloaded non-core stuff like real estate and its shares in telecom Cogeco.
The news of investor interest in MLSE comes on the heels of the tariff war that is causing some uncertainty in some business segments. Staffieri said the company has seen little-to-no impact on Rogers directly as most of its suppliers are inside Canada, with other parts coming largely from outside the U.S.
But Staffieri did say there is “a bit of an unknown and a risk with respect to handsets,” citing comments made by the U.S. administration. Those comments could include President Trump recently saying he believed Apple’s iPhones – devices largely made in China – could be made in the United States.
Staffieri said the telecom will continue to watch this closely.
Bell is another telecom watching closely. “With the Canadian economy under threat, public policy should incentivize Canadian companies that invest in critical infrastructure and support highly skilled, good-paying jobs in Canada to help future-proof Canada’s economy,” a spokesperson told us. “That means building more telecommunications infrastructure to help Canadians connect their business to local and world markets.
“We will monitor the impact of these tariffs now that they are in place, but we have the scale and flexibility to manage through supply chain impacts and continue delivering for our customers.”
For the first quarter, Rogers saw a significant decline in postpaid wireless net additions, adding just 11,000 in the quarter compared to the nearly 100,000 it added in the first quarter of 2024. Gross additions were also down to 337,000 compared to 443,000 over that period.
Staffieri said during the call that the decline was in line with the decline in the market the company was expecting. He said the giant was “very price disciplined” in the quarter and focused on higher value segments with minimal discounting.
That’s despite the fact that competitors, including Quebecor, have challenged the incumbents on plan pricing.
“We were disappointed to see the market still … continuing with some discounts in the below-$40 price point,” Staffieri said. “But we owe that to, we think, the market adjusting to a smaller size,” including from a tamer federal immigration policy.
Rogers’s monthly average revenue per user (ARPU) in the wireless segment was down $1.12 to $56.94 compared to the same period last year.
Staffieri said Rogers sees an opportunity for the market in Canada to move more in line with the United States, where he says promotional activity centres on handsets while holding relatively steady on the plans themselves.
That said, the total postpaid base was still up to roughly 10.8 million compared to the 10.5 million from the same period last year, and churn was down to 1.01 per cent compared to 1.10 from last year.
Rogers added 23,000 net new prepaid subscribers, often viewed as a funnel toward higher-end plans, compared to a loss of 37,000 last year. Churn in this space was also down from 3.9 per cent last year to 3.34 per cent this quarter, and the total prepaid grew to 1.13 million.
Wireless revenues were $2.54 billion in the quarter, up slightly from the $2.53 billion from last year; cable revenues were down to $1.93 compared to $1.96 over the same period; and media revenues were up to $596 million compared to $479 million.
Total revenues were up to roughly $5 billion compared to the $4.9 billion from the same period last year, with net income also up to $280 million compared to $256 million over that period.
