The reaction of the Toronto media has been full on over the top. Some are saying it is brilliant, others are concerned about so much power with one corporation and others convinced it doesn't create winners in Toronto sports. All of those things can be true. Toronto will only have two major sports franchises not owned by Rogers. The Professional Women's Hockey League team and the upcoming WNBA team.
There are numerous sports ownership groups out there. Few are as entrenched in one city covering as many sports as Rogers now does. The only ownership they presently lack is a NFL team. Few have captured one city as well as Rogers. Some of the debt from the purchase Rogers has made should come from NBA expansion fees, renewal of NHL TV rights and facilities rentals for concerts and events to name a few areas. Sports franchises continue to rise in value all the time.
Bell retain TV rights for 20 years for hockey and basketball for CTV and TSN. This is probably the least the government would allow. Rogers having complete control would be awful. It would likely violate antitrust in Canada and possibly elsewhere. After Rogers gobbled up Shaw, the Canadian government of any political stripe is likely to frown on the company if the act like pigs.
Bell is massively in debt after investing in their 5G network. They also have kept their dividend going for 16 years. Their corporate media buy of CTV/TSN assets have not served them well and they have cut 1/4 quarter of their workforce. The amount of debt has been weighing them down. Selling the teams while retaining rights is likely the best way to reduce debt if that is what they plan to do. Paying a dividend and not reducing debt would be dumb.
Rogers also has debt. It is why they are selling Monday rights to NHL games in Canada to Amazon for the next two years. That starts this year. For cable cutters who have Rogers and Bell, it is yet another reasons to stop cable altogether. Amazon already does Thursday Night Football and hired veteran Al Michaels but they have been graced with trash games for the last year. The first game for the NHL on Amazon is a more promising Pittsburg Penguins and Montreal Canadiens. They will also be doing a NHL talk show on the network.
Bell can't seem to run the conglomerate they have. The heavy debt, huge corporate bonuses and large dividend means they don't run their assets very well. The rely on government subsidy and protection. The six big global ad companies led by Google and Facebook hoover all the ad money. This is a world-wide problem and the U.S and Europe are acting on in antirust. The Liberal government in Canada has helped subsidize news and taxed companies like Google. The Conservatives have indicated big changes are coming including the likely end of CBC. It is unclear if this helps internet, media and telecoms in in Canada. They could all be close to folding and asking for international buyouts in the next years.
Bell keeps begging the government for help but it is hard to be sympathetic when they always cut, always acquire businesses and then cut them and give their leadership bonuses while having large profits and asking the government for subsidies or loosened rules to acquire more and provide less.
There is talk Bell might sell the antenna real estate it has all over the country. They are already downsizing real estate assets they have. Lower interest rates should help them. However, it has literally been decades of high prices and cuts over the years.
Rogers could make the sporting assets a real money spinner but they also seem to acquire assets, debt and high fees with other cuts in service. Meanwhile, telecom competition is growing while profits remain high. It could be Rogers feels more heat if their teams are chronic underperformers.
No comments:
Post a Comment