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Rogers Wins Major NHL Deal - Analyst Blog
Yesterday, Rogers Communications Inc. ( RCI ) announced that the company has entered into a 12-year broadcast and multimedia agreement with National Hockey League (NHL) for national rights to NHL games on all platforms and languages. The agreement will include all games, the playoffs and the Stanley Cup final which Rogers can stream live through the Internet on mobile devices and over satellite radio in addition to television.
The 12-year agreement will start from the 2014-2015 session and will continue up to the 2025-2026 session. Rogers will pay approximately $4.96 billion to NHL throughout the 12-year term. The company has decided to sublicense the networks to national broadcasters CBC and TVA Sports to air selected regular and post-season games. The financial terms of the sub-licensing deals are not disclosed. However, the agreement is subject to approval by the NHL's Board of Governors at its meeting on Dec 9 th - 10 th .
Rogers is the largest telecom operator in Canada with a significant heterogeneous portfolio consisting of wireless, wireline, cable TV and TV broadcasting networks. The company, together with BCE Inc. ( BCE ), completed the acquisition of a 75% stake in Maple Leaf Sports & Entertainment. With this acquisition, Rogers can deliver high quality sports content anywhere, anytime, on any platform through its wireless/cable networks and broad range of media assets.
On Jan 14, 2013, Rogers entered into an agreement with Shaw Communications Inc. ( SJR ) to acquire Shaw's cable system in Hamilton, Ontario and secure an option to purchase Shaw's Advanced Wireless Services (AWS) spectrum holdings in 2014. Rogers will sell its one-third interest in specialty channel, TVtropolis, to Shaw and has also entered into negotiations with the latter for the provision of certain services in Western Canada. Rogers will invest about $700 million.
Nevertheless, Rogers' Cable operations are currently facing increased competition. BCE Inc.'s entry into cable TV services through its subsidiary Bell Canada has increased competitive pressure. The company is aggressively rolling out IPTV network. Another competitor, TELUS Corp. ( TU ), is also rapidly gaining market traction. At this juncture, a major deal will NHL will definitely help to strengthen Rogers' top line. Rogers currently has a Zacks Rank #3 (Hold).
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