Rogers and BCE win regulatory approval for MLSE takeover

Canada’s communications regulator has approved the C$1.32 billion ($1.34 billion) acquisition of a majority stake in Maple Leaf Sports and Entertainment (MLSE) by Rogers and BCE.

The deal gives two of the country’s biggest telecoms operators 75% of MLSE, which owns the Toronto Maple Leafs, the renowned ice hockey team, and the Toronto Raptors, of basketball fame.

Canada’s communications regulator has approved the C$1.32 billion ($1.34 billion) acquisition of a majority stake in Maple Leaf Sports and Entertainment (MLSE) by Rogers and BCE.

The deal gives two of the country’s biggest telecoms operators 75% of MLSE, which owns the Toronto Maple Leafs, the renowned ice hockey team, and the Toronto Raptors, of basketball fame.

Rogers and BCE had been mainly interested in getting hold of the accompanying broadcasting rights and three speciality sports channels: Leafs TV, Raptors NBA TV and Gol TV. MLSE is also in the process of launching two new services—Mainstream Sports and Live Music Channel.

Rivals have expressed concern about the growing media power of Rogers and BCE and say they are disappointed the Canadian Radio-television and Broadcasting Commission (CRTC) has allowed the two operators to take control of MLSE.

But the regulatory body insists the takeover will not be damaging to competition. “When deciding whether or not to approve a proposed ownership transaction, the Commission must be persuaded, in light of the application and the public record, that an approval is in the public interest,” said Jean-Pierre Blais, chairman of the CRTC, in a statement. “In this case, we have been convinced that the transaction benefits Canadians as it will lead of the creation of new home-grown sports programming.”

Nevertheless, the CRTC has imposed some tough conditions on Rogers and BCE in exchange for rubberstamping the deal.

In particular, the two operators will have to spend as much as C$7.5 million over the next seven years on the creation of new sports-themed programming by independent producers based in Canada.

Rogers and BCE had proposed to spend just C$3.8 million on such “tangible benefits”.

The CRTC is due to review an even more controversial media deal next month in the shape of BCE’s proposed C$3.38 billion takeover of Astral Media.

Competitors including Quebecor, Cogeco Cable and Eastlink say they intend to fight hard to block that transaction. The chief executives of all three companies have reportedly written to James Moore, Canada’s heritage minister, to say that BCE’s takeover of Astral would not be in consumers’ interest.

The Astral deal would dwarf the takeover of MLSE. BCE has said it plans to spend C$200 million over the next ten years on “tangible benefits”, including C$40 million on improving the quality of telecoms services in the north of the country.

In its statement on the MLSE transaction, the CRTC attempts to soothe fears about the growing dominance of several big companies in Canada’s media market. “… the CRTC is committed to ensuring that Canadians have access to a wide choice of programming on different platforms,” it says. “In 2011, the CRTC prohibited companies from offering television programs on an exclusive basis to their mobile or internet subscribers. Any program broadcast on television must be made available to competitors under fair and commercially reasonable terms.”