Canada-based Rogers Communications Inc. (RCI) plans to gain complete control over sports television network Score Media Inc. by purchasing its full stake for $167 million. The transaction awaits shareholder and other customary approvals.
The proposed acquisition of Score Media Inc. will also give 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 (exclusive of its digital media business).
Rogers Media, a unit of Rogers Communications, will retain 10% of the stake in the digital media business – including the Score.com website and mobile applications – that will be spun out as a new business before the closing of the deal. The remainder will be owned by its existing shareholders.
The acquisition of Score Media – Canada's third largest specialty sports channel – will enable Rogers Communications to gain additional 6.6 million television subscribers, contributing $45 million of annual subscription and advertising revenues, coupled with approximately $15 million of annual EBITDA. This is expected to not only drive the company’s media segment business but also add more varieties to its Rogers Sports Entertainment network.
Rogers Communications, which together with Bell Canada, a 100% subsidiary of BCE Inc. (BCE), recently bought a 75% stake in Maple Leaf Sports & Entertainment Ltd., is currently planning to improve its sports content in order to boost its media segment business.
In the recently concluded second quarter, Rogers Communications reported dismal results, where both its top and bottom line missed the Zacks Consensus Estimates.
We maintain our long-term Neutral recommendation for Rogers Communications Inc. Currently it has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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