Potential Sale Of Blue Jays Could Be Complicated Task For Rogers Communications
Rogers Communications reportedly is considering selling assets including the Blue Jays, but it is "too soon to say" if the company has "definitively placed a 'for sale' sign" on the team, according to Shi Davidi of SPORTSNET. There "don’t appear to be any firm plans, processes or timelines in place to put the club out on the open market, and any potential transaction will be very complicated." But the possibility of a sale is "quite clearly getting very serious senior-level consideration as made clear" by Rogers CFO Tony Staffieri on Tuesday. Staffieri said, "There isn’t anything imminent that we’re about to announce, but we’re certainly looking at the alternatives." Davidi noted the concept of "surfacing the value" of non-core company assets such as the Blue Jays "has been mentioned" by Rogers execs before, most notably by President & CEO Joe Natale during an October conference call with analysts. Staffieri’s comments were the "most specific public indication to this point that the idea of selling the Blue Jays is far more than a concept being casually tossed around." If sold, MLB "would likely prefer the team go to an individual, as opposed to another corporation," with Blue Jays Chair Edward Rogers -- son of the company's late founder Ted Rogers -- one "speculative possibility." Davidi noted a commitment to keep the Blue Jays' broadcast rights with Rogers "would no doubt impact any potential sale, as would the need for hundreds of millions in renovations at Rogers Centre" (SPORTSNET.ca, 12/6).
MOVING PARTS: In Toronto, Morgan Campbell writes selling the Blue Jays "would secure a healthy profit for Rogers." But before making that move, the company "would have to consider the long-term implications of uncoupling Sportsnet TV and radio networks from their most reliable source of content, ratings and revenue." A new owner "could profoundly affect the on-field product." The Blue Jays last season finished 76-86 and missed the playoffs for the first time since '14, but the club "still posted the fourth-best attendance" in MLB (TORONTO STAR, 12/7). The GLOBE & MAIL's Andrew Willis writes selling the Blue Jays "means unscrambling an omelette" as a large part of the team's value is "based on broadcast revenue." Rogers would "never want" Blue Jays games appearing on a rival network, so it is "going to lock up broadcast rights prior to selling the franchise." Not doing so "would diminish the sale price" and the moment the Blue Jays are sold, Rogers "would be forced to cough up a significant sum for local TV rights." Willis notes the "family dynamic" at Rogers could mean one option would be to "sell the team but keep it in friendly hands." Edward Rogers could be a "possible buyer," but there are a "host of problems" with that scenario. How would everyone involved, including MLB, "deal with the conflicts that come with an owner who also runs the team's broadcaster?" (GLOBE & MAIL, 12/7).
CASH CONSIDERATIONS: In Toronto, Michael Lewis writes selling the Blue Jays "could free up cash" for Rogers at a time "when new capital expenditures loom." The company had already "signaled that it intends to ramp up spending on network improvements amid surging data use." Rogers is also expected to bid on Ottawa’s "auction of wireless spectrum licences in the 600 MHz band." MLB teams' increasing value, ballpark naming rights fees and increasing player costs "may also be factors in Rogers’s considerations." The Blue Jays’ contribution to Rogers’ income is "not segmented from Rogers Media earnings so it’s unclear if the team’s failure last year to make the playoffs had an impact on the bottom line" (TORONTO STAR, 12/7).
A TOUGH SELL? Former MLSE President & CEO Richard Peddie weighed in on the potential sale with a series of tweets: "Jays are going to be a very tough sell. Weak Cdn $. Old stadium. Low free cash flow. Questions around size of new broadcast deal. Most likely candidate would be group wanting to move franchise to US. ... Will be very tough to find a Canadian group to spend $1.7B Cdn. Only [Rogers] / Bell were interested in spending $2B for all of MLSE’s assets and a cash flow considerably higher than the Blue Jays." He added Rogers Centre "will be part of the sale. New owners face some large capital improvement bills. If owners move franchise we have a huge while elephant." Freelance writer Ari Shapiro tweeted, "Fans showed up in droves last year, marketing rights alone makes one wonder why they'd ever part with this golden goose."