Rogers Communications Inc.
) plans to gain complete control over sports television network
Score Media Inc. - Canada's third largest specialty sports channel
- by purchasing its full stake for $167 million. The transaction
awaits shareholder and other customary approvals.
The proposed acquisition of Score Media Inc. will provide Rogers
Communications the right to access television assets of the Score
Television Network, that includes Voice to Visual Inc., mixed
martial arts promotion The Score Fighting Series, and The Score
Television Network. However, the company left out Score's digital
business whose fantasy league and team analysis applications are
very popular among sports fans.
Score is an out an out sports channel that provides sports news
and information and has a higher appeal among young subscribers.
Subsequent to the acquisition, Rogers will get hold of four
regional sports channels including the national Sportsnet ONE,
Sportsnet World, Sportsnet 590 and Sportsnet 960.
The acquisition of Score Media will enable Rogers Communications
to gain an additional 6.6 million television subscribers,
contributing $45 million of annual subscription and advertising
revenues, coupled with approximately $15 million of annual
Sports channel in general has higher attractiveness to viewers
as it allows them to view live games apart from providing
information about what is happening in the world of sports.
We believe this is a strategic acquisition by the company to
improve its sports channel offering and thus attract and retain
subscribers and advertisers.
Rogers Communications, which together with Bell Canada, a 100%
), recently bought a 75% stake in Maple Leaf Sports &
Entertainment Ltd., is currently planning to improve its sports
content to boost its media segment business. It is expected that if
Rogers and Score Media can integrate successfully and offer an
attractive package to its viewers it will drive the company's media
The current Zacks Consensus Estimate for Rogers Communication
Inc. is pegged at 87 cents for the third quarter with a growth rate
estimate of (0.97%). For 2012, the Zacks Consensus Estimate stands
at $3.08 with a growth rate of (4.05%) but for 2013, the Zacks
Consensus Estimate stands at a loss of $3.30 with a growth rate of
We retain our long-term Neutral recommendation on Rogers
Communication. Currently, Rogers has a Zacks #3 Rank, implying a
short-term Hold rating.
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