Options open for Rogers and Jays
SPORTS
• Rogers Communications, which has said it will keep ownership of the Toronto Blue Jays, could look to leasing, licensing and other financial tools to generate value from the club, sports dealmakers told Reuters.
Rogers’ new chief executive, Joe Natale, and chief financial officer Tony Staffieri have said in separate conversations with investors since October that the cable TV and wireless company wants to “surface value” from the franchise.
Some people interpreted that to mean they were considering selling the team, which Forbes earlier this year valued at US$ 1.3 billion.
In an emailed statement, Rogers spokeswoman Sarah Schmidt said: “As we have said, there are no plans to sell the Jays.”
She declined to comment on a range of options for extracting value from the team, but added: “We continue to look for the best way to get credit for our incredible sports portfolio in our overall company valuation.”
Two professional sports dealmakers said one option for generating cash could include the sale and leaseback of the nearly 30- year- old Rogers Centre.
The team could also sell licensing rights to the facility, which was known as SkyDome until Rogers brought it for $ 25 million in 2005, the sources said.
Such deals can be lucrative. Bank of Nova Scotia agreed in August to pay $ 800 million in a 20- year naming rights deal for the arena that houses the Maple Leafs and Raptors, now known as the Air Canada Centre.
Rogers paid about $ 160 million for 80 per cent of the Blue Jays in 2000, before buying the remaining stake in 2004.
Bankers said the $ 1.2 billion paid for the Miami Marlins in a deal that closed in September likely pushed up comparative valuations, meaning that the Blue Jays, Canada’s only MLB franchise, would likely garner significantly higher offers than that if put up for sale.
Another option would be for family-controlled Rogers to spin off the team, creating a separate company that could tap debt markets to pay athlete salaries, finance stadium improvements and fund other operations, according to three industry dealmakers who declined to be identified because discussions about potential deals are confidential.
The current corporate structure at Rogers treats the team as a fully consolidated business unit, meaning that boosting spending to acquire top players would cut into the parent company’s earnings, which are closely watched by investors.
Having flexibility to spend more on talent, without worry about missing Wall Street earnings forecasts, could lead to more onfield success, which would boost long-term revenue from ticket sales, merchandising and broadcast rights, the sources said.