Yahoo Finance BCE, Rogers Acquire MLSE
Bell Canada, a 100% subsidiary of BCE Inc. (BCE), received all regulatory and sports league approvals to obtain the ownership position in Maple Leaf Sports & Entertainment Ltd. (“MLSE”).
Bell acquired a 75% stake jointly with its major rival Rogers Communications Inc. (RCI) but on the condition that both companies will have to spend $7.5 million over the next seven years on new sports-themed programming. The deal was announced in December last year.
The remaining 25% stake will be held by Kilmer Sports, which is owned by Larry Tanenbaum, the chairman of MLSE and the governor of the National Hockey League, the National Basketball Association and Major League Soccer.
The stake in MLSE strengthens Bell’s sports leadership with the right to broadcast four sports channels of the former — Maple Leafs, Raptors, Marlies and Toronto FC. Bell Canada is focusing largely on the expansion of the media segment given the rapid growth in video usage and media advertising demand.
Following the acquisition of CTV Network in April last year, Bell Canada is leading the Canadian broadcasting market with several popular sports TV channels such as TSN and RDS, specialty channels such as CTV, TSN2, RDS2, RSI, TSN Montréal Canadiens, TSN Winnipeg Jets and NHL Network Canada and various sports radio stations including TSN Radio in Montréal, Toronto and Winnipeg.
Beyond enhancing its media leadership, BCE continues to focus on five more strategic areas including investment in broadband network and services, accelerating wireless services, leveraging wireline momentum, improving customer service and achieving a competitive cost structure.
We are maintaining our long-term Neutral recommendation on the stock. For the short term (1-3 months), BCE retains the Zacks #3 (Hold) Rank.
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