Rogers Communications Inc. RCI-B-T is in active talks with investors interested in its sports assets, the telecom’s executives said Wednesday, as the company seeks to unlock value from its portfolio of sports holdings and boost its share price.
Speaking to analysts Wednesday morning, Rogers chief financial officer Glenn Brandt said the company has had “significant interest from various institutional investors” seeking to invest in its sports assets.
Rogers is set to take over BCE Inc.’s $4.7-billion share of Maple Leaf Sports and Entertainment Ltd. (MLSE), pending regulatory and league approvals, which will bring its stake in the sports entertainment company to 75 per cent. Once that deal is concluded, Mr. Brandt said the company believes its share will be worth about $15-billion.
Rogers also owns the Toronto Blue Jays.
“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,” Mr. Brandt told analysts.
Speaking to shareholders later in the day at the company’s annual general meeting, Rogers chief executive officer Tony Staffieri said the company is working on a plan to monetize its sports assets over the medium term.
“I want to be clear: we’re investing in these appreciating assets because we see a clear path to monetize them and to unlock their unrecognized value in our share price,” he said.
“We recognize the pressure we have seen on our share price. And we’re taking the necessary steps to address this,” he added.
Rogers recently signed an $11-billion deal to broadcast NHL games in Canada, saying it expects the agreement will be immediately profitable. The new contract is worth more than double the $5.2-billion Rogers agreed to pay in 2013.
Overall, the Toronto-based communications and entertainment company met expectations in what analysts predicted would be an underwhelming quarter for the country’s telecom sector.
“Given the significant drag in stock performance lately, we would not be surprised to see a relief rally in the stock; however, the outlook remains sluggish,” said Scotiabank analyst Maher Yaghi in a Wednesday morning note to investors.
Rogers added 11,000 postpaid wireless subscribers, above analyst consensus of 7,000. But the net subscriber additions were sharply down 87 per cent from last year, mainly due to slowing immigration following federal target cuts and fewer student visas.
The company added 23,000 prepaid phone subscribers, beating consensus of 21,000.
Historically, Rogers has won the greatest share of new Canadian subscribers, making it particularly vulnerable to the slowing population growth.
While the company’s rivals continued to offer discounts and tit-for-tat mobile phone plan promotions, Rogers raised prices for its plans in April, making it the first of the big three to do so in recent quarters, according to CIBC analyst Stephanie Price. Quebecor Inc.’s Freedom Mobile, spun off during Rogers’s acquisition of Shaw, has continued to put downward pressure on cellphone plan pricing.
As the first quarter typically represents a small percentage of annual subscription adds, the company focused on higher-value segments with minimal discounting, Mr. Staffieri told analysts. He said the company expects greater opportunities to grow average revenue per user – a metric that measures the value of each subscriber – later in the year.
Rogers said it is removing the 2-per-cent discount on dividend reinvestment plan (DRIP) shares, suggesting a shift in capital allocation strategy as the company aims to pay down debt.
Telecom stocks are typically considered safe buys during economic downturns. Despite broad tariff threats from the U.S., however, Rogers’s stock price is down nearly 20 per cent since the beginning of the year on concerns about industry headwinds and high debt levels.
To address those concerns and maintain its investment-grade credit rating, Rogers recently finalized the terms of its $7-billion network deal with Blackstone Inc. and four Canadian pension plans. Rogers said that following the deal, its debt to leverage ratio will fall from 4.3 to 3.6 per cent.
The company had long-term debt of $42.2-billion as of March 31, up from $38.2-billion at the end of December. In February, the company issued about $4-billion of new debt in order to repay maturing notes and to partially fund the MLSE acquisition.
Rogers reported $4.5-billion of service revenue during the three-month period ended March. 31, up 2 per cent from last year. Total revenue was $4.9-billion, meeting analyst consensus. Net income was $280-million, up 9 per cent.
Media revenue was $596-million in the first quarter ended March 31, up 24 per cent from last year primarily as a result of higher sports-related revenue. However, the segment posted an EBITDA loss of $67-million for the quarter.
Churn, the rate of customer turnover on a monthly basis, improved slightly among postpaid wireless subscribers.
First-quarter profit amounted to 52 cents per share, up from 48 cents per share in the same period of 2024.