The Rogers Centre in Toronto, home to the Toronto Blue Jays, was already part of Rogers's sports holdings. By acquiring the remaining stake in MLSE, the company is taking full control of other Toronto sports franchises.Gregory Shamus/Getty Images
Rogers Communications Inc. RCI-B-T has struck a deal 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 will own 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.
“This is a defining moment for Rogers,” its president and chief executive officer, Tony Staffieri, said in a release Monday morning.
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.
It also means Rogers will need to temporarily stretch its balance sheet to accommodate the cost of the acquisition, before unloading a portion of the assets and using those funds to pay down debt.
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That minority sale will present a rare opportunity to acquire a slice of multiple valuable sports assets, and be sure to attract a wide range of suitors, experts say. Rogers has already declined an overture to be introduced to Saudi Arabia’s Public Investment Fund – which in April said it plans to pull funding for the LIV Golf league – as part of the minority stake negotiations, according to two sources with knowledge of the matter.
The Globe and Mail is not identifying the sources because they were not authorized to speak publicly about the matter.
Rogers’s acquisition of the remaining MLSE stake 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.
In an e-mail to The Globe, Rogers spokesperson Zac Carreiro said the liquidity includes “existing liquidity and additional bank credit facilities,” but declined to provide further details, saying the company is in a quiet period ahead of its second-quarter earnings call on July 22.
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.
According to multiple other sources with knowledge of the deal, Rogers had arranged a credit facility – a preapproved sum of money that lenders agree to let companies borrow – to ensure it has the funds to buy out the remaining MLSE stake.
The Globe is not identifying the sources because they were not authorized to speak publicly about the matter.
The deal gives Rogers sole ownership of the Toronto Maple Leafs, Toronto Raptors, Toronto Argonauts and Toronto FC.Frank Gunn/The Canadian Press
The acquisition will require the company to temporarily stretch its leverage to 4.5 times debt to EBITDA (earnings before interest, taxes, depreciation and amortization) until it can complete minority sales, estimated Bank of Montreal analyst Tim Casey in a note to investors.
In order to reduce its leverage, Rogers has indicated plans to sell between 20 and 30 per cent of the combined media assets. This implies a minority sale worth between $5-billion and $7.5-billion at current estimates, Mr. Casey added.
The company’s media strategy execution is being watched closely by credit agencies.
Moody’s, S&P and Morningstar DBRS all currently place the company’s senior unsecured notes one level above non-investment grade, also known in the industry as “high yield” or “speculative” grade.
In a March note, Moody’s said it expects Rogers to reduce its leverage below four times debt to EBITDA over the next 12 to 18 months, but warned it could downgrade the company’s ratings should it sustain that ratio over the longer term.
In April, DBRS Morningstar maintained a positive outlook for Rogers in light of the upcoming sports transactions. Speaking Monday, analyst Scott Rattee said this confirmation comes with the expectation of another review in one year – in April, 2027 – at which point the agency would have greater clarity on the company’s finances.
Monday’s sports deal “sets a new benchmark valuation” for the Canadian sports assets, said Bank of Nova Scotia analyst Maher Yaghi in a note to investors.
The deal implies a total MLSE value of about $17.4-billion, which is 39 per cent higher than the one suggested when Rogers purchased Bell Canada parent BCE Inc.’s BCE-T 37.5-per-cent stake last year, he said.
This means Rogers is “underwriting a much higher sports asset value than investors assumed,” he said.
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The deal on Monday came earlier than many analysts had assumed. Rogers and Kilmer Sports had arranged a system to determine a price based on multiple valuations that it would turn to should the two companies fail to agree to terms, but settled on a price before going to that stage.
The agreement creates a windfall for Ontario Municipal Employees Retirement System, the $145-billion pension fund that bought an indirect 5-per-cent stake in MLSE through Kilmer Sports in November, 2023.
At the time, OMERS bought in for US$400-million, or about $547-million at the exchange rate at the time. The pension fund is now selling its stake and exiting its investment in Kilmer for about $870-million, which represents a nearly 60-per-cent return on its invested capital in fewer than three years, according to The Globe’s calculations.
In an open letter Monday, Kilmer owner Larry Tanenbaum thanked fans for their confidence in his leadership. Mr. Tanenbaum’s sports investment journey 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 reports from Andrew Willis and James Bradshaw