Team logos above the entrance to Maple Leaf Sports and Entertainment located at the Air Canada Centre at 50 Bay St.Fred Lum/The Globe and Mail
Scott Stinson is a writer based in suburban Toronto and author of the Unobstructed Views newsletter.
When Rogers Communications RCI-B-T swooped in to buy all of the National Hockey League’s Canadian national broadcast rights in 2013, the $5.2-billion, 12-year deal was seen as a tremendous bet on the rising value of live sports as content.
That contract – which transformed Canadian media by putting Rogers Sportsnet on equal footing with its older rival, BCE’s BCE-T TSN, and by starving the CBC of its biggest revenue generator outside the government – now seems quaint by comparison.
On Wednesday, Rogers announced its $4.7-billion agreement to purchase BCE’s 37.5-per-cent ownership stake in Maple Leaf Sports and Entertainment, which would give Rogers 75-per-cent ownership of the company that controls all of Toronto’s major sports franchises (it already fully owns the Blue Jays).
There are many reasons for Rogers to make such a move. The one that stands out is that this is an even larger wager on the ever-increasing value of sports broadcast rights.
There has long been a question in sports-media circles about rights fees: Will the bubble ever burst? And Rogers seems to be saying: Never.
Last summer, Toronto businessman Larry Tanenbaum agreed to sell 5 per cent of his 25-per-cent ownership of MLSE to pension giant OMERS. The US$400-million sale valued MLSE at US$8-billion, which at the time was evidently alarming to Rogers and Bell.
The Globe and Mail reported that the telecom companies challenged the details of the sale, with the high valuation potentially complicating an existing agreement for Rogers and Bell to buy out Mr. Tanenbaum’s remaining stake in 2026. (That dispute was eventually quietly resolved, according to a Sportsnet report in April.)
But now, Rogers is buying out Bell at an even higher valuation, $12.5-billion, or about US$9.2-billion. The expectation from Rogers must be that fees for broadcast rights will keep climbing. Bell, meanwhile, has retained the long-term right to pay, according to a release, “fair market value” for its existing regional rights to Toronto Maple Leafs and Toronto Raptors games, a provision that could cost Bell dearly if fees keep climbing and it hopes to keep those games on TSN.
The argument in favour of Rogers is that live-sports rights have kept ballooning. The National Basketball Association is in the last year of a U.S. broadcast deal that paid it US$24-billion over nine years. Its next deal, over 11 years, will pay it more than triple that amount, US$76-billion. The National Football League is paid more than US$12-billion annually through its series of broadcast deals.
Even the smaller leagues have been able to get in on the action. The WNBA signed a new U.S. media rights deal in July worth US$200-million annually, up from US$60-million.
One of the key factors driving the increases has been the arrival of streaming services in the lives-sports sphere. Amazon.com Inc.’s AMZN-Q Prime Video broadcasts NFL games and is part of the new NBA deal, while it has sub-licensed some of Rogers’s Canadian NHL games beginning this coming season. Apple Inc. AAPL-Q spent US$2.5-billion for a 10-year global rights deal with Major League Soccer.
Even Netflix Inc. NFLX-Q has dipped in a toe. It paid a reported US$150-million just to broadcast two NFL games on Dec. 25, 2024.
But the possibility of an eventual broadcast upheaval remains. Some of the major U.S. players include traditional networks such as CBS and ABC, which are hanging onto live sports as one of the few reasons for consumers to maintain a cable subscription. Streaming services that were once in a race to sign up new users have said they will scale back on the amounts spent on programming.
And a major U.S. holder of regional sports rights has been trying to exit bankruptcy proceedings for more than 18 months, leaving the local deals of 33 MLB, NBA and NHL teams uncertain.
What if, instead of networks and streaming services all bidding for the same finite number of games, the next round of broadcast deals sees far fewer interested buyers after a shakeout? What if the bubble does eventually burst?
The next big turning point for the Canadian market comes after the expiration of that once ground-breaking Rogers NHL deal, two seasons from now. Will Rogers try to control all of it again? Will it have to fend off potential interlopers such as Amazon and Apple? Or will it end up in a bidding war with some other rival?
No doubt the NHL hopes so.