I doubt that the story is getting much play in the US media but at the end of last week a deal to sell the largest collection of Canadian sports properties was agreed.
Maple Leaf Sports and Entertainment (MLSE) own and operate the Toronto Maple Leafs of the NHL, the Toronto Raptors of the NBA, and Toronto FC of MLS along with interests in Canadian TV – Leafs TV, GolTV (Canada) and NBA TV.
The majority owner of MLSE was the Ontario Teachers’ Pension Plan but their shares were put on the selling block months ago.
The price accepted by Ontario Teachers’ Pension Plan values the collection of prized assets at $2.1 billion and that suggests that the company spins off at least $100m in profit annually.
Any sale of this magnitude is going to send tremors through various interrelated businesses.
The fact that the new owners are broadcasters is not unusual – what is unusual is that two bitter broadcasting rivals have teamed up to buy MLSE.
Rogers Communications operate Rogers Sportsnet in Canada while BCE Inc. operate TSN (ESPN hold an interest in the station).
Each company will own 37.5% MLSE and 25% will owned buy a minority owner. The extraordinary move by the rivals is all about the need to own the broadcasting rights to the aforementioned sports teams.
Or more to the point the strange relationship and arrangement probably has more to do with each ensuring that they don’t get outflanked with the rights falling exclusively into the others grasp.
No doubt the two parties will announce publicly that both are committed to making the arrangement work and that both have the best of intentions.
Almost certainly the assignment of the broadcast rights the first time around will be satisfactory to all.
But the “partnership” will not work in the long run. You cannot expect two rivals to suddenly put aside the need to compete every day for viewers, advertisers and broadcast rights and then hold hands and sign campfire songs when it comes to down to MLSE related rights.
The third wheel of a minority owner only makes the situation worse as anyone who has had to operate within such confines can testify
It is the ultimate marriage of convenience and one that is sure to finish in acrimony and a painful, costly and public split.
We will just have to wait and see who gets their heart broken.
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