The sports money machine

Money Reporter, MPL Communications Inc.
133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846

 

The sports world is all a-buzz about this week’s announcement of a broadcast deal struck between the National Hockey League and Rogers Communications Inc. (TSX:RCI.B). Rogers will be paying the NHL $5.2 billion, and in return Rogers will be the national broadcaster for most, if not all, NHL games to be shown in Canada, for the next 12 years. If you do the math, that works out to $433 million per year.

It would seem there is money to be made in sports. On occasion we tell you, for example, about National Football League franchises. Whether the teams make or lose money every year is not material; it’s the franchise value that counts. On average, NFL teams have seen a 15% increase in franchise values for more than a decade. That’s 15% annually.

Bringing the subject back closer to home, there was a news report that came out recently that also involved Rogers. Rogers owns the Toronto Blue Jays outright (whereas it owns only 37.5% of Maple Leaf Sports and Entertainment).

Thirteen years ago, Rogers bought the Blue Jays for $137 million. Bloomberg recently went through the finances of baseball to come up with franchise valuations, and pegged the current value of the Blue Jays at US$950 million, 12th in the league. The team alone is worth $573 million, which represents an annual return of 11.5%.

 

Money Reporter, MPL Communications Inc.
133 Richmond St.W., Toronto, ON, M5H 3M8. 1-800-804-8846

Leave a Reply

Your email address will not be published.