Rogers agrees to purchase Sportsnet by Chris Zelkovich

by Chris Zelkovich

Ted Rogers finally got his wish yesterday.

As expected, Rogers Communications exercised its option to buy CTV's 40 per cent ownership in Sportsnet. Assuming the deal meets with federal regulatory approval, the communications giant will realize its dream of a sports media empire with Sportsnet and the Blue Jays as its foundation.

"My job was to sell (Sportsnet) and to maximize its value," said Scott Colbran, the trustee appointed to oversee the sports channel's sale. "I believe I've been successful in achieving that."

Colbran would not divulge details of the sale, but analysts have estimated Sportsnet's value at about $300 million. That would put CTV's share in excess of $120 million.

Neither Rogers nor CTV would comment yesterday.

"I think that Rogers and CTV are both pleased," said Colbran. "Rogers is pleased to be acquiring CTV's interest in Sportsnet programming, and CTV is pleased with the price."

Though Rogers now has control of 70 per cent of Sportsnet on paper, taking over is contingent on the regional channel's other partners exercising their options on the shares and Rogers getting federal approval.

The former should not be a problem. "Rogers has told me that both Molson and Fox Sports Net Canada are happy to stay where they are," Colbran said. Molson owns 9.9 per cent and Fox 20 per cent.

Getting approval from the Competition Bureau and the Canadian Radio-television and Telecommunications Commission (CRTC) shouldn't be too difficult, either.

The former is concerned mainly with monopolies on advertising.

"There really isn't an issue there," said Ian Morrison, spokesperson for the lobby group Friends of Canadian Broadcasting.

Since the CRTC paved the way for the deal by changing its policy on cable companies owning specialty channels, that hurdle no longer exists.

"The real concern for Rogers is that while the CRTC said it was changing the policy, it hasn't issued a new policy yet," Morrison said. "The CRTC could apply some conditions that Rogers might not be happy with."

Those could include conditions on the amount of Rogers-owned programming Sportsnet could air and restrictions to ensure that Rogers' cable operation didn't favour Sportsnet over TSN, Morrison said.

A decision would likely take three to five months.

Once approval is received, Rogers will be free to pursue its dream of an interconnected sports media empire that includes the Jays, its cable holdings, cellphone network, radio stations, high-speed Internet service and magazines. Getting control of Sportsnet was one of the main reasons Rogers bought the Blue Jays last year.

Even though it was frustrated for more than a year in its attempts to get control of Sportsnet, Rogers wasted no time in using the Blue Jays as a cross-promotional vehicle.

Not only are Blue Jays games sponsored by Rogers-AT&T Wireless, but Jays games have also been used to promote other Rogers products. Even cable bills include deals and discounts on a variety of Rogers properties, from its video stores to the Jays and the Toronto Phantoms.

Cross promotion will no doubt increase when Rogers takes over Sportsnet, as will speculation that Rogers has its eyes on Maple Leaf Sports and Entertainment, owner of the Leafs and Raptors.

Yesterday's announcement will also speed up negotiations for a new Blue Jays broadcast deal. The team has indicated it wants an increase in rights fees, and there's little doubt that Sportsnet will be used as a tool to achieve that goal.

© The Toronto Star