TORONTO (AP) - Canada's largest telecommunication companies announced Friday they have agreed to buy the NHL's Toronto Maple Leafs and NBA's Toronto Raptors in a billion-dollar deal as the fierce telecom rivals seek content for their sports channels, digital properties and smartphones.
Rogers Communications and BCE Inc purchased a majority stake in Maple Leaf Sports and Entertainment from the Ontario Teachers' Pension Plan for about $1 billion in one of the richest sports deal in North American history.
Rogers and BCE, major competitors in wireless, internet and cable, will each own 37.5 percent of Canada's largest sports conglomerate while Toronto businessman Larry Tanenbaum upped his minority stake from 20 to 25 percent in a total sale worth $1.32 billion Canadian (US$1.3 billion)
The storied Maple Leafs are hockey's richest club and have long been the most followed hockey team in hockey-mad Canada. In all, the Leafs have won 11 Stanley Cups, but none since 1967. MLSE also owns the Air Canada Centre, the home of the Maple Leafs and Raptors and a major concert venue in Canada's largest city.
The deal also includes the Toronto FC of Major League Soccer, a minor league hockey team, and the Leafs and Raptors TV stations.
Rogers already owns the Toronto Blue Jays baseball team and their stadium, the Rogers Centre, as well as the Canadian sports channel Sportsnet.
Rogers CEO Nadir Mohamed said the Blue Jays are not a part of the deal. He said he was thrilled to be a part owner of the iconic Maple Leaf brand. BCE and Rogers are the largest wireless, internet and cable companies in Canada. They will share the sports content of MLSE.
Mohamed noted that Rogers and BCE worked together as broadcast partners at the 2010 Winter Olympics in Vancouver. BCE controls the rival TSN sports channel
Mohamed said it will bolster Sportsnet and their digital, print, mobile and radio properties. Mohamed said more people have wireless devices like smartphones and tablets and they want to watch live sports. Advertisers pay a premium for such viewers.
"Sports content is king. Let's face it nobody wants to watch a game two days later," Mohamed said. "Between the two organizations I can't think of anybody that can bring live sports to Canadians wherever they are without missing a second."
George Cope, the president and CEO of BCE, said it delivers on their goal to deliver the best content to what he calls the "new four screen world that we live in."
"We believe, increasingly, that live content is going to be more and more important in the technology world and there is no better live content than the professional sports that we are talking about today," Cope said.
Cope said BCE will continue its minority ownership position in the NHL Montreal Canadiens despite owning part of the rival Maple Leafs. The deal will require regulatory approval and approval by each of the leagues. It's expected to close next summer.
The $110 billion Canadian (US$108 billion) pension plan, which represents 300,000 current and retired teachers, said the deal came a few weeks after they announced it had given up trying to sell the stake. Shortly after that, BCE and Rogers stepped forward with a bid that met all of its original terms and conditions, Teachers' said.
Mohamed said the new owners are focused on winning, but will take a hands-off approach and allow Tanenbaum to oversee the day-to-day operations. Tanenbaum said bringing the companies together will give MLSE the resources to build championship teams. Tanenbaum will remain as chairman of MLSE and as a governor of the NHL, the NBA and Major League Soccer. A person familiar with the deal said Tanenbaum will have first rights at buying the stake of BCE or Rogers should they decide to sell. The official spoke on condition of anonymity because they weren't authorized to speak publicly.