The joint acquisition of Toronto Maple Leafs (an ice hockey club
based in Toronto, Canada) by
Rogers Communications Inc.
) may lead to huge losses for both the companies as there is a
chance of a lockout of National Hockey League (NHL) in Canada, this
In a bid to boost its sports network, Rogers Communications,
together with Bell Canada, a 100% subsidiary of BCE Inc., bought a
75% stake in Maple Leaf Sports & Entertainment Ltd., (a sports
company that entails to popular sports like hockey, basketball and
NHL is a very popular ice hockey tournament in Canada that draws
huge audiences. However, the tournament - that was slated to start
from October 11 - appears to be a distant dream since the
participating teams continue to face revenue sharing issues with
Lockout of the NHL tournament may elevate the cost for Rogers
Communications in terms of loss from ticket sales, merchandising
and television advertising revenue totaling $C50 million during the
quarter. In order to offset the potential loss, which the company
may incur in case of a disruption of the tournament, Rogers
Communications may put up concerts and organize basketball matches
during that period.
Few days back, Rogers Communications also bought a sports
television network - Score Media Inc., which is Canada's third
largest specialty sports channel will also enable, Rogers
Communications to gain an additional 6.6 million television
Increased adoption of smartphones and tablets has completely
changed the TV viewing options for customers. However, viewing of
live sporting events is not available through these wireless
devices. So in order to boost the streaming of live sporting events
as well as to lure more subscribers, Rogers Communications is
continuously adding these sports content to their network.
Rogers Communications Inc. has a Zacks #3 Rank, implying a
short-term Hold rating. Considering the fundamentals in the long
run, we maintain our Neutral recommendation on the stock.
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