Maple Leaf Sports & Entertainment No Longer For Sale Despite Interest From BCE, Rogers
The Ontario Teachers’ Pension Plan Friday confirmed that it has “pulled the plug on its auction process” to sell Maple Leaf Sports & Entertainment, according to Perkins, Robertson & Erman of the GLOBE & MAIL. Canada’s two largest telecommunications firms, BCE and Rogers, “teamed up on a last-ditch effort in recent weeks to buy” MLSE, but disagreements between the two “dissolved the alliance and killed the deal.” The companies “were prepared to pay between” C$1.3-1.4B for the OTPP’s 79.5% stake in MLSE, and would have “split the price down the middle.” Neither firm “wanted to gamble on a hefty takeover of MLSE, but neither firm was willing to risk letting the valuable assets go to their rival.” They knew that even if they could, “they faced another hurdle: Winning over [MLSE Chair] Larry Tanenbaum, owner of the remaining 20.5 per cent.” Dividing up the broadcast and Internet assets “would require his approval in order to change MLSE’s shareholders' rights agreement.” A number of private equity firms also “took a look at MLSE.” The OTPP is believed to have “had an unofficial asking price of about [C]$1.8-billion, and said from the start it would hold onto its stake if bids didn't meet expectations” (GLOBE & MAIL, 11/26). In Toronto, Alphen & Westhead cited sources as saying that the OTPP “would likely consider selling the stake again if someone stepped up with a blockbuster bid and could stickhandle around key obstacles.” A source said, “It’s off the market but the next announcement could be a sale” (TORONTO STAR, 11/25). Also in Toronto, Rob Longley noted unless someone “is willing to overpay, it won’t necessarily be happening soon” (TORONTO SUN, 11/25).
SKATING AWAY: In N.Y., Josh Kosman wrote Hockey HOFer Wayne Gretzky “has been shut out in his attempt to have his investor group gain control” of MLSE. A source said that Gretzky, “who fronted private-equity powerhouse Providence Equity Partners and its $1.5 billion offer … had their shot at NHL ownership slapped aside” by league Commissioner Gary Bettman. The source said that Bettman “would not bend the league rules that allow a team owner to borrow only up to 50 cents for every dollar of team value -- and rejected the offer.” However, another source said that it “was not the NHL that slapped away the Gretzky/Providence bid” (N.Y. POST, 11/26). Gretzky's agent, Darren Blake, yesterday said that Providence "never approached him and the other groups that did were 'people kicking tires.'" The GLOBE & MAIL's David Shoalts reports almost "all of the discussions -- and they were all informal -- about Gretzky taking a role with MLSE were with" Toronto-Dominion Bank, a company Gretzky endorses (GLOBE & MAIL, 11/28).
WHAT'S NEXT? In Toronto, Rick Westhead cited sources as saying that MLSE “is planning to move ahead and develop a regional sports channel that would show Maple Leafs, Raptors and Toronto FC games.” The “surest sign that Maple Leaf Sports is plotting a new network is the company’s hiring” of sports media consultant Ed Desser, who has helped Time Warner plan its own RSN in L.A. Several TV execs said that a Maple Leaf Sports channel "could expect to get about" C$1.50 per subscriber "at most in its first contract." While the channel “might show Maple Leafs and Raptors games during the winter … it’s unclear what the channel would broadcast during the summer months.” Meanwhile, sports industry execs said that “a search committee formed by Maple Leaf Sports to find its next chief executive is considering” former Canadiens President Pierre Boivin for the job. MLSE President & CEO Richard Peddie “will retire by year’s end” (TORONTO STAR, 11/27). The GLOBE & MAIL's Shoalts reports the "front-runner internally" is Exec VP & COO Tom Anselmi, who "will either be named acting president or assume Peddie’s duties and keep his title as COO in a sort of audition for the top job until a permanent president is named." The rest of the management team "will remain in place" (GLOBE & MAIL, 11/27).