After Rogers’ MLSE deal, Leafs-Raptors-Jays IPO close to a slam dunk, say analysts

financialpost.com:

The acquisition of BCE Inc.‘s stake in Maple Leaf Sports & Entertainment for $4.7 billion this week could put Rogers Communications Inc. in position to create a standalone sports powerhouse including the Toronto Maple Leafs, Toronto Raptors and Toronto Blue Jays, which could eventually be spun out in an IPO, a move that analysts say might finally allow the company to get value recognition for the baseball franchise it has owned for nearly 25 years.

“We expect that RCI (Rogers) will incorporate the Blue Jays into a sports and media structure, creating a three-franchise entity featuring teams from major sports leagues within one of the largest sports markets in North America,” said Desjardins analyst Jerome Dubreuil, one of several who see a sports IPO as close to a slam dunk.

Such a spin-off, Dubreuil said in a note, would “maximize the odds” that the value of the sports assets — in particular the Blue Jays, which some in the financial industry view as a stranded asset —  are reflected in Rogers’ share price.

It is understood that the Toronto-based telco has been mulling ways to have the value of the sports teams recognized beyond the lucrative broadcasting rights to games. That applies to the Blue Jays in particular, which have reportedly been losing money for several years. Mark Shapiro, chief executive of the Jays, told the Globe and Mail in April that the team had been losing “a lot of money” due in large part to hefty player salaries. And, last year, he told the Toronto Sun that it had been “a pretty tough four or five years” for revenue and the Jays had “lost quite a bit” of money.

With this week’s transaction, Rogers will become the controlling partner of MLSE, with a 75 per cent stake in the company that also owns