CRTC approves BCE, Rogers purchase of MLSE
Published on Thursday August 16, 2012 Vanessa Lu Business Reporter
#MSLEdeal
The Toronto Maple Leafs are one step closer to being owned by two giant phone companies.
The Canadian Radio-television and Telecommunications Commission ruled Thursday that it would not block a $1.32 billion bid by BCE Inc. and Rogers Communications Inc. for a 75 per cent stake in Maple Leaf Sports & Entertainment Ltd., the multi-sport franchise that includes television holdings.
Ontario Teachers’ Pension Plan, which first invested in MLSE in 1994, wanted to cash in on its investment so it put up its stake up for sale last year.
MLSE, which also owns the Toronto Raptors, Toronto Marlies and the Toronto FC, owns five television services including Leafs TV, Golf TV and NBA TV Canada as well as two services that have not yet launched, Mainstream Sports and Live Music Channel.
“When deciding whether or not to approve a proposed ownership transaction, the commission must be persuaded, in light of the application and the public record that an approval is in the public interest,” said CRTC chairman Jean-Pierre Blais in a news release.
“In this case, we have been convinced that the transaction benefits Canadians as it will lead to the creation of new homegrown sports programming.”
The companies are required, under the tangible benefits policy, to spend $7.5 million over the next seven years on new sports-themed programming by independent Canadian producers.
But more than property and sports teams, the deal is about the rise of laptops, smartphones and tablets — and the lucrative business of providing content for those high-tech devices.
Competitors like Telus and Cogeco opposed the sale, arguing it would create a sports duopoly if Bell and Rogers, which control TSN and Sportsnet, also owned a stake Canada’s two biggest sports teams.
Rogers also owns the Toronto Blue Jays and Bell has a minority interest in the Montreal Canadiens.
The CRTC said competitors were most concerned about the “ancillary broadcast rights” related to NHL or NBA assets, and the increased marketing or negotiating power those rights may grant to sports services controlled by Bell and Rogers.
However, the regulator said neither those services nor the assets of MLSE were before the commission as part of this transaction.
“Accordingly, the commission does not consider it necessary to impose additional safeguards to prevent anti-competitive behaviour as part of its determinations on the present transaction,” the CRTC added.
The CRTC did reiterate an earlier ruling it made in 2011 that prohibits companies from offering television programs on an exclusive basis to their mobile or Internet subscribers. Any program broadcast on television must be made available to competitors under fair and commercially reasonable terms.
The Competition Bureau also signed off on the deal in May, but cautioned it would keep a close eye on the outcome for one year and could still bring matters before its tribunal.
The sale has also received approvals from the various sports leagues.
Bell spokeswoman Jacqueline Michelis said the deal would close soon, though she had no specific date.
“We’re happy that the CRTC has approved the MLSE transaction — we’ve now received all required regulatory approvals,” she said.
Deborah Allan, a spokeswoman for the Ontario Teachers’ Pension Plan, said the deal’s closing was imminent.
“It’s the time line we were hoping for when we announced the transaction in December,” she said.
MLSE spokeswoman Rajani Kamath said the company is pleased all the regulatory approvals are now complete. “We look forward to the closing of the transaction and starting a new chapter for Maple Leaf Sports & Entertainment,” she said.
