Rogers still committed to Jays after earnings hit
Rogers Communications Inc. chief executive Joe Natale remains fiercely committed to the Toronto Blue Jays even after costly trades of two players led to an earnings miss for the Canadian telecommunications firm.
“We are very much focused on the broad sports business and we’re focused on investing in the capabilities of our sports properties as a whole,” Natale said.
“We continue to operate the best media and sports assets in our industry with increasing efficiency and you’ll see that in the full-year margin improvement for media,” he added on an analysts’ call.
The Toronto-based company reported last week adjusted earnings per share in the first quarter that were below the lowest analyst estimate, partly due to a hit in media revenue following the trades of catcher Russell Martin and designated hitter Kendrys Morales, Natale said.
The Blue Jays had to pick up portions of both players’ contracts as part of the deals.
Tougher comparables with last year when Major League Baseball paid the Blue Jays a hefty distribution also hurt results.
“When you take out those specifics items, the underlying business is very strong and very healthy,” Natale said. Rogers gave a guidance of seven per cent to nine per cent growth in earnings before interest, tax, depreciation and amortization for 2019, which accounts for baseball operations as well, he said.
In 2017, chief financial officer Tony Staffieri said the company was considering selling assets such as the Blue Jays and a stake in media company Cogeco Inc. to offload capital for other investments.
On Thursday, Natale said he has no plans to sell the team.
“We have a great and thriving sports broadcast business, it’s a business that is the No. 1 brand in Canada when it comes to sports viewing,” Natale said. “Team ownership and the connection to that is an important factor in being a leader and being a strong player in the sports business.”
Last week, Rogers won a $1.7-billion federal bid for a total of 52 licences of 600 MHz spectrum, which it says is imperative for growing the capability of 5G next-generation wireless service in Canada.
“Having 600 MHz spectrum especially in this quantity is a great source of competitive advantage,” Natale said. “We think that 600 MHz will be the workhorse of 5G. When you couple it with 3500 and millimeter wave spectrum, it is the trio wave of spectrum that will deliver 5G capability in Canada.”
Rogers fell 3.76 per cent at the close in Toronto on Monday to $66.31, the biggest decline in six weeks.