Rogers to cut costs and drive revenue after MLSE deal

Rogers Communications Inc. says it expects to uncover both revenue and cost synergies across its expanded sports holdings after becoming the majority owner of Maple Leaf Sports & Entertainment (MLSE). The Toronto-based telecommunications company told investors that it believes the market undervalues its media and sports assets and that it is “pursuing all options … to monetize and surface the very substantial unrecognized market value” of those holdings.

Earlier this month Rogers completed a $4.7-billion purchase from rival BCE Inc. for a 37.5% stake in MLSE. The acquisition, which closed on July 1 after securing required regulatory and league approvals, made Rogers the majority owner of the sports and entertainment group that controls the NHL’s Toronto Maple Leafs, the NBA’s Toronto Raptors, the CFL’s Toronto Argonauts, MLS’ Toronto FC and the AHL’s Toronto Marlies. Rogers also retains ownership of Major League Baseball’s Toronto Blue Jays.

Rogers looks to unlock shareholder value through sports and media synergies

“On sports and media, it’s clear that there is significant underlying value and we are squarely focused as we put the assets together … to continue to strengthen our balance sheet,” Rogers president and CEO Tony Staffieri said on a conference call as the company released its latest quarterly results. He added that a key priority is to “surface the value for shareholders” and that Rogers is evaluating multiple approaches to do so.

Staffieri said it is still early to provide detailed projections about potential synergies within MLSE, but he indicated Rogers expects to outline more specific plans before the end of 2026. He pointed to Rogers’ recent track record in realizing efficiencies — such as those from its 2023 merger with Shaw Communications Inc. — as evidence of the company’s ability to optimize operations.

While Rogers did not provide specifics, executives signaled the company sees opportunities to combine operations and assets. Some analysts on the call suggested Rogers might integrate the Blue Jays and the Rogers Centre stadium with MLSE venues such as Scotiabank Arena to reduce redundant costs and capture new revenue streams. “I expect that as we roll in the Toronto Blue Jays’ Rogers Centre with Scotiabank Arena and the other venues within MLSE and the sports teams within MLSE, we will find revenue and cost synergies,” said chief financial officer Glenn Brandt.

MLSE acquisition lifts 2025 revenue outlook; quarterly profit falls

Rogers updated its 2025 guidance to reflect the addition of MLSE. The company now expects service revenue to grow between 3% and 5% year-over-year in 2025, up from a previous forecast of 0% to 3% growth, citing the anticipated contribution from the sports and entertainment properties.

For the second quarter ended June 30, Rogers reported profit attributable to shareholders of $148 million, or $0.29 per diluted share, down from $394 million, or $0.73 per share, a year earlier. The decline was driven in part by higher restructuring, acquisition and other costs, which rose to $238 million in the quarter from $90 million the prior year.

Consolidated revenue for the quarter totaled $5.22 billion, up from $5.09 billion a year ago. Wireless service revenue was up 1% as the subscriber base expanded, while wireless equipment revenue increased 13%, largely due to stronger device sales to existing customers. Media revenue climbed 10%, supported by strong NHL playoff audiences on Sportsnet and the addition of Warner Bros. Discovery channels. Cable revenue was up 1%.

Subscriber growth moderates, churn improves

Adjusted earnings per diluted share were $1.14 for the quarter, down slightly from $1.16 in Q2 2024. Rogers added 61,000 net mobile subscribers in the quarter, including 35,000 postpaid additions — a slowdown from the 112,000 postpaid additions recorded in the same period last year. Monthly churn for net postpaid mobile subscribers improved to 1.00%, down from 1.07% year over year.

Scotiabank analyst Maher Yaghi described the results as “broadly in line with expectations,” noting that wireless subscriber activity was relatively healthy amid ongoing market normalization and lower population growth. He added that recent price increases introduced since early June provide a more favorable backdrop for the wireless industry.

Rogers reported 26,000 prepaid net additions in the quarter, compared with 50,000 a year earlier. Average monthly revenue per user (ARPU) for mobile phones was $55.45, down from $57.24 in Q2 2024. Retail internet net additions totaled 26,000 for the quarter.

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