Rogers Communications Inc. has agreed to buy the remaining 25% stake in Maple Leaf Sports & Entertainment (MLSE) from Kilmer Sports Inc. for $4.35 billion, gaining full control over major Toronto sports teams including the Maple Leafs, Raptors, Toronto FC, and Argonauts. This acquisition will add to Rogers' existing sports holdings, which include the Toronto Blue Jays, Rogers Centre, and Sportsnet. The deal, which will give Rogers 100% ownership of MLSE, is anticipated to close in the fourth quarter of 2026, pending league approvals.
This transaction implies a total valuation for MLSE of approximately $17.4 billion, which is a 39% increase from the valuation suggested when Rogers acquired BCE's stake last year. Analysts, such as Maher Yaghi of Scotiabank and Tim Casey of Bank of Montreal, noted that this acquisition sets a new benchmark for Canadian sports asset valuations, indicating that Rogers is underwriting a significantly higher value than previously assumed by investors. Adam Shine of National Bank Financial also pointed out the substantial jump in MLSE's value, highlighting a more than 39% increase in less than two years.
The deal creates a significant windfall for the Ontario Municipal Employees Retirement System (OMERS), a $145 billion pension fund. OMERS had acquired an indirect 5% stake in MLSE through Kilmer Sports in November 2023 for approximately $547 million (US$400 million at the time). OMERS is now selling its stake for about $870 million, representing a nearly 60% return on its invested capital in under three years. This return highlights the rapidly increasing value of sports assets, which has also been reflected in the rising grossed-up value of MLSE.
Rogers plans to finance the $4.35 billion acquisition with committed liquidity, utilizing its available $6 billion in liquidity, which includes $1.4 billion in cash and $4.6 billion in credit facilities. To manage its balance sheet and reduce leverage, Rogers intends to sell a minority stake (20-30%) in its consolidated sports, media, and entertainment assets over the next year. This potential minority sale is estimated to be worth between $5 billion and $7.5 billion. Rogers' CEO, Tony Staffieri, previously valued the combined sports assets at more than $25 billion, and this upcoming minority sale presents a rare opportunity for investors to acquire a share of valuable sports holdings.
Following the completion of the deal, MLSE board members Larry Tanenbaum (chair emeritus) and Dale Lastman will step down. The acquisition will temporarily stretch Rogers' leverage to 4.5 times debt to EBITDA until the planned minority sales are completed. The deal was finalized earlier than many analysts expected, as Rogers and Kilmer Sports reached an agreement on pricing before resorting to a predetermined valuation system.
