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SBD/March 14, 2011/Franchises
Ontario Teachers' Pension Plan To Explore Sale Of 66% Stake In MLSE
Published March 14, 2011
BIG TIME SALE: In Toronto, Dan Ilika noted the sale, if completed, would be the "largest in Canadian professional sports history." If the OTPP "did indeed hire Morgan Stanley, it would mean it got the go-ahead from the NHL, which must be consulted before any possible sale discussions can take place." The hiring of Morgan Stanley "will now allow the group to come up with the highest possible bids before approaching Tanenbaum and TD Capital." Tanenbaum "has long been interested in becoming sole owner of MLSE, but whether he can match the potential bids remains to be seen." MLSE is the "largest sporting group in Canada," owning the Maple Leafs, Raptors, AHL Marlies and MLS Toronto FC, as well as Air Canada Centre, BMO Field and Ricoh Coliseum, and Leafs TV and NBA TV Canada (TORONTO SUN, 3/13). The OTPP "would not confirm or deny that it had hired Morgan Stanley to conduct the search." MLSE President & CEO Richard Peddie "declined comment" (TORONTO STAR, 3/13). In Toronto, Steve Simmons cites sources as saying that the OTPP is "looking to hit a financial home run," as the pension plan is looking to see if it "can cash out with at least" $1.3B. But a source close to MLSE said, "Anybody who says they know what's going on in this deal is not telling the truth. ... The thing about this deal is, even the people who know, don't know." Simmons notes those who know Tanenbaum "wonder whether he has the stomach -- or the willingness -- to live through more years of the personal heartache that has gone along with owning the Leafs and the Raptors." He "may not want to take on such onerous debt, or new partners of his choice, in order to come up with more than $1 billion for absolute control" of MLSE (TORONTO SUN, 3/14).
IS ROGERS INTERESTED? The GLOBE & MAIL's Robertson, Shoalts, Erman & Perkins report Rogers Communications Inc. is "conspicuously absent from the list of suitors interested in acquiring" the OTPP's stake in MLSE. High-ranking sources at Rogers said that the company "has 'very little' interest in putting in a bid, even though there were reports late last year that Rogers was in talks to buy MLSE." The sources said that Rogers "walked away from any notion of buying the Toronto Maple Leafs and the Toronto Raptors and other MLSE assets last spring and never revisited the idea." Rogers officials "expect to be invited to look at MLSE's books when the formal auction process begins, but the company does not intend to change its mind" (GLOBE & MAIL, 3/14). But in Toronto, Cribb & Van Alphen cite sources as saying that there are "four clear contenders salivating over the notion of owning all of that high-demand sporting content for their networks: Rogers Communications, Bell Canada, Shaw Communications and Telus Communications." Many experts "see Rogers as the leading suitor." The addition of the Maple Leafs and Raptors to Rogers' current ownership of the Blue Jays "would provide it with an unprecedented stranglehold in the Canadian sports broadcasting world, and one of the most commanding packages of properties anywhere." While "wealthy individual bidders are less likely, two names have emerged" -- Thomson Reuters Chair David Thomson and RIM co-CEO Jim Balsillie (TORONTO STAR, 3/14). But the GLOBE & MAIL's Shoalts writes, "Contrary to some fans' wishful thinking over the weekend, it will not be BlackBerry billionaire Jim Balsillie, whose attempts to put an NHL team in Hamilton made him toxic to the league's governors" (GLOBE & MAIL, 3/14). The WALL STREET JOURNAL's Weinberg & Dummett note it was "unclear if active negotiations about the stake were under way" (WALL STREET JOURNAL, 3/14).
BUSINESS AS USUAL: Maple Leafs G Jean-Sebastien Giguere said of the potential sale of the OTPP's stake, "It's not like the team is moving or anything like that. We don't have uncertainty that Phoenix would have or Atlanta would have. The way an owner runs a team is pretty well governed by ... the collective bargaining agreement. From one owner to the next, it's very similar" (TORONTO STAR, 3/14).