Rogers considering sale of Blue Jays, stake in Cogeco
Toronto Blue Jays' Troy Tulowitzki, right, and Darwin Barney take to the field before MLB baseball action against the Baltimore Orioles, in Toronto, Tuesday June 27, 2017. (Mark Blinch/The Canadian Press)
David Paddon, The Canadian Press
Published Wednesday, December 6, 2017 6:03AM EST
Last Updated Thursday, December 7, 2017 7:49AM EST
TORONTO -- Talk of Rogers Communications Inc. possibly selling the Toronto Blue Jays, while keeping a connection to Canada's only major league baseball team, makes a lot of sense to Norman Levine -- and he has an unusual perspective.
Levine is not only a proud, long-time Jays fan but also managing director of Portfolio Management Corp., which invests money on behalf of individuals and families with at least $1 million of investable assets.
As a fan, Levine would be happy to see the team sold to an enthusiastic owner or group. As a chartered financial analyst, he thinks that Rogers doesn't need to own a professional sports team and should sell it for the best possible deal.
"If Rogers puts the Blue Jays up for sale, it should come with not only a nice price tag but also with an agreement that Rogers will be the exclusive TV, radio, internet -- whatever you can think of -- broadcaster for that team for (as many) years as they can get away with in their contract."
"That's where the money is for Rogers. It's not for owning the Blue Jays for any other reason," Levine said Wednesday.
He was commenting a day after a senior Rogers executive said the Toronto-based company -- one of Canada's biggest wireless, cable and media firms -- is considering a sale of the team and its stake in a smaller cable and media company to free up capital for its main communications businesses.
Rogers chief financial officer Tony Staffieri didn't discuss who might buy the team, or if a deal would include the Rogers Centre, or what they would be worth. In fact, he didn't say a sale is necessarily going to happen.
The company issued an emailed statement Wednesday that said its sports assets including the Toronto Blue Jays "have performed really well for us."
"As we have said, we would like to surface value and get credit for these assets in our overall company valuation," the statement continued.
Levine said that, from a shareholder's point of view, Rogers would have a responsibility to get the best combination of a good price for the team, a good price for the Rogers Centre and a good price for the broadcasting rights.
From a fan's point of view, Levine hopes the team isn't sold to another publicly traded company or a pension plan because they have a responsibility to make the most profit -- and that will hurt the Jays performance on the field.
"That would be a worst-case scenario, from a fan point of view," Levine said. "Whereas if it's owned by a crazy individual with lots of money (who wants to win), that's great if you're a fan."
"There are lots of these guys out there. Lots of them you don't even hear about until they show up. They don't have to be CEOs of public companies. There are a gazillion private companies out there that are huge that you don't hear about. And the guys that own them have tonnes of money."
Aravinda Galappatthige, an analyst who covers Rogers for Canaccord Genuity, estimates that the Blue Jays would be worth about $3.20 per share of Rogers, based on an estimated value of $1.65 billion for the team. He estimates the Rogers Centre is worth about $200 million to $400 million.
"However, we highlight that while asset sales are being considered at a high level, we do not believe there any imminent deals in place at this time," Galappatthige wrote in a note to clients.
Galappatthige also noted that Rogers has other non-core assets including a 37.5 per cent interest in Maple Leaf Sports and Entertainment Ltd., which owns the Toronto Maple Leafs hockey team and Toronto Raptors basketball team.
In total, he estimates Rogers has non-core assets that could be worth close to $5 billion or $9.70 per Rogers share.
As for the company's investment in Montreal-based Cogeco Inc. (TSX:CGO) and Cogeco Communications Inc. (TSX:CCA), Galappatthige said Rogers' share in the two Cogecos would be worth about $1.53 billion.
Rogers stock closed Wednesday at $65.97, up 55 cents.