I read in an article this morning that he gets to be around as long as he likes.Originally Posted by ensco
I'll try and find the link but I'm not going to promise anything.
It was in one of the Globe articles this morning.
I read in an article this morning that he gets to be around as long as he likes.
I'll try and find the link but I'm not going to promise anything.
It was in one of the Globe articles this morning.
The $2 billion + is a fiction. It serves the interests of Teachers, the leagues, and the bankers to overstate these numbers. Teachers gets $1.32 billion for their 79.5% in the "business", which has $500 million in debt on it at the time of the sale, but not until then. The $1.32 billion in proceeds would include approx $400 million in debt proceeds (ie Teachers' 79.5% share of that new $500 million debt put on as part of this transaction), therefore the residual Teachers gets, around $930 million, is for their shares in MLSE. I think the correct Enterprise Value is around $1.65 billion ($930 million for 79.5% translates to $1.17 billion for 100%, plus $500 million in new debt).
Part of the confusion arises because of the changes in debt happening simultaneously to the sale of the shares. The right way to think about this is to compare it to the housing market. This is the functional equivalent of a $500,000 house that the owners take a $200,000 mortgage out on at the last second, putting the mortgage proceeds in their pocket, then two new people partner up to buy the house and assume the mortgage. Note that unlike the housing market, this "mortgage" is non-recourse, ie the lender can't go after the new new buyers if payments aren't made, which is an important driver of these deals. So now the house "costs" only $300,000. Now imagine each new owner announcing triumphantly that the "cost" is only $150,000 each.
The reason a house price never includes any reflection for the mortgages is because mortgages are always repayable on a sale, mortgages are always recourse to the owner of the house (not the house itself only), and because it's simpler. But many business transactions are deliberately confusing, so that the seller can construct a story that overstates the proceeds, and the buyer has a story that understates cost.
Remember, there is a need for Bell/Rogers to keep the cheque size they are actually writing down. This is why Teachers/Tanenbaum are putting the $500 million in debt on their before the sale. Bogers story is that they get "control of MLSE forever for $533 million". Plus, and this is important down the line when the cries for spending on players comes, Bell/Rogers get to say the debt was there when they arrived, sorry about that, gotta worry about debt service.
The further confusion arises because, after Bell/Rogers buy Teachers share, there are further non-disclosed adjustments made where Larry goes from 20.5% to 25%, and has an option to go to 30%, while Bogers go down from 79.5% to 75%. This part is the price Larry extracted to go along. The math behind these moves is not clear yet.
Last edited by ensco; 12-13-2011 at 11:43 AM.
"There are some people who might have better technique than me, and some may be fitter than me, but the main thing is tactics. With most players, tactics are missing. You can divide tactics into insight, trust, and daring." - Johan Cruyff
http://www.ctv.ca/CTVNews/Canada/201...ension_100406/
That figure is from 2009, however,
MLS is a tough, physical league, that emphasizes speed, and features plastic fields, grueling travel, extreme weather, and incompetent refs. - NK Toronto
BTW - Wind Mobile does not have its own infrastructure. Some but not a lot.
And Wind has already been very public about what a "tough" market Canada is and saying how they may not stay.
There's an article in the National Post today headlined: BCE to fight CRTC ruling on content sharing.
It's a sign of the future. Telus complained that Bell have exclusive rights to the NFL and NHL on mobile devices and the CRTC ruled that Bell has to make the content available to other carriers, "Canadians shouldn't be forced to subscribe to a wireless service from a specific company to access their favourite content."
It'll be interesting to see what happens. But clearly Bell is going for content exclusivity as much as it can.
Yes, Raptors are short term issue. By next year they will have a high lottery pick and tons of cap space to sign quality players in next off season so they can make it to playoffs next season.
FYI, Raptors are still making money and they're worth $399 million which is around top 10 in NBA right now.
What are you talking about? They're putting up their own towers and using AWS 1700/2100 frequency which they bought from government.
The issue about being a short term problem is more a question of, can basketball be profitable long-term in this city? So far it really hasn't shown it can.
To your next point, what the Raptors have been deemed "worth" and whether they make money are two very different things. You and nor do I know if the Raptors make money because MLSE is not a publically traded company. However popular belief is that there is no way the Raptors have made money in recent years. Now that could change with an improvement on the court but there is little evidence that is changing anytime soon.
What are you talking about? They use Rogers fibre when they don't have line of site etc
Wireless only works with switches. It doesn't only works with towers.
I didn't say they are merely a re-seller.
15+ years in NBA is enough to prove yes Toronto can support basketball.
Given Raptors are making a profit each year (unlike half of teams in NBA) I would say Raptors aren't in a bad shape what some people here like to make out to be. Not only that, but TV ratings for basketball is so much better now than it was 10 years ago. So the game is growing and now that we got Canadians playing in NBA now and the future, I except basketball will keep on growing in Toronto and rest of Canada. Also if you look at attendance, fans still show up to games unlike most losing teams and some winning teams (Like Atlanta) where they barely get 12,000 per game. Even Miami has a hard time selling out their games last season despite having Wade, James and Bosh.
Issue more has to do with Leafs peaking (profit and interest wise) its value and cashing it in now before it drops.
Raptors are just secondary here while no one really cares about TFC.
Steve Simmons says that all the people he spoke to know nothing about ousting Tannebaum.
He also made a good point that the NHL would not be too cool with kicking out Larry b/c he holds many high positions at the BOG.
Moderator
I agree with you that regulators like the CRTC have become nothing but pathetic rubber stamps - particularly for Rogers and Bell's interests.
Ideally we should have 4-5 major players in the telecommunications industry, like the United States has. Unfortunately, Rogers and Bell are firmly intertwined with ownership of our country's telecom infrastructure, which is part of the problem.
I've advocated for a while that the government should essentially say "tough shit" to them and forcefully buy the infrastructure back at a fair price so they can no longer monopolize it, but of course, that would require politicians with balls.
The CRTC also needs to let this country grow up a bit, and stop giving potential foreign competition the cold shoulder. Wind Mobile's story is a testament to what a pain in the ass it can be to break into our markets.
For an idea of how much the mollycoddling of Rogers and Bell has hamstrung the growth of telecoms in this country - check out the United States' internet and wireless options sometime. For internet, they generally get faster speeds, higher bandwidth caps, and lower prices. For cellphones, they generally get lower prices combined with less contract years. The problem isn't too much or too little regulation in our case - it's regulators that are in the pocket of two giant companies.
It's a farce.
- Scott
“Heroism breaks its heart, and idealism its back, on the intransigence of the credulous and the mediocre, manipulated by the cynical and the corrupt.” ~Christopher Hitchens
Since this deal was announced the numbers have never sat well with me. The Teachers revealed they got 1.32 billion for their 80% share in MLSE. It was later revealed that each Bell and Rogers paid 533 million each for a 37.5 share of the company with Larry getting a 5% boost to his position. This means when you times $533 million x 2 you get 1.066 billion for the 75% share total. I just can not believe Larry paid over 200 milion for a mere 5% to get to the 1.32 billion that has been reported.I've been scratching my head at the numbers for a few days now. I won't even bother.
What is obvious is that the initial asking price was definitely too high as was mentioned by many people.
Remember The Man, The Legend, The Goal 5-12-07 and All That #9 Left On The Pitch, Thanks For The Memories !!!
Scumbag Steve is Tannebaum's bumboy.
TORONTO FC, 2017 MLS CHAMPIONS!!! (Still the greatest in league history!)
For any reporters that read this: ask Mohamed/Cope the following:
"After the transaction is done, what will be the debt level on MLSE?"
A bunny with a good nose is telling me it'll be almost $700 million, which is 7x EBITDA, which is ... unbelievable, unsustainable, Glazer -like....
"There are some people who might have better technique than me, and some may be fitter than me, but the main thing is tactics. With most players, tactics are missing. You can divide tactics into insight, trust, and daring." - Johan Cruyff
So Larry says how long is stays is strictly between him and God. Great.
http://www2.macleans.ca/2011/12/16/t...lay-in-hockey/
"There are some people who might have better technique than me, and some may be fitter than me, but the main thing is tactics. With most players, tactics are missing. You can divide tactics into insight, trust, and daring." - Johan Cruyff
Interestingly enough Telus' CEO was on BNN today and he was talking about not going for the content play saying distribution was enough of the pie. That being said, he really seems to be bucking the trend.
Was he saying he's okay with Telus not being able to stream NHL and NFL games to their customers?
No, he quoted the regulations a couple of times. Said the law should protect his company and others from content being locked to one provider. Also, that it's not in anyone's interest to have their content reach a limited audience.
Great pr piece from "journalist" Mary Ormsby;
Larry Tanenbaum: His ‘footprint is everywhere in this city’
Competition Bureau to Potential Wireless and Internet Startups: Drop Dead
http://www.bloomberg.com/news/2012-0...s-sale-1-.html
"There are some people who might have better technique than me, and some may be fitter than me, but the main thing is tactics. With most players, tactics are missing. You can divide tactics into insight, trust, and daring." - Johan Cruyff
Hey, they lifted some of the restrictions on foreign-owned companies in the wireless business - if they have less tan 10% of the market...
Does this mean that the deal closes sooner? There was talk that the deal would be delayed until September because of the competition bureau.
*crosses fingers that heads can start to roll at TFC FO*
Moderator
I'm a little confused why you think this equals that. The CRTC and Competition Bureau already gave telecom startups the finger over a series of decisions spanning years. Heck, they are doing it to internet startups as we speak.
I think the synergy between media companies and sports teams is pretty gross (the Sportsnet pushing of the Jays occasionally makes me feel like I need a shower), but the shoe has already dropped on that one. Two of these empires sharing ownership of MLSE isn't really much different. I always anticipated this would sail through with little resistance from the government.
- Scott
“Heroism breaks its heart, and idealism its back, on the intransigence of the credulous and the mediocre, manipulated by the cynical and the corrupt.” ~Christopher Hitchens
This definitely hardens my view that TFC should do nothing until we see what Bell/Rogers is doing with TFC management.
"There are some people who might have better technique than me, and some may be fitter than me, but the main thing is tactics. With most players, tactics are missing. You can divide tactics into insight, trust, and daring." - Johan Cruyff
It's not about media companies owning sports franchises. If either one was doing this, I'd be fine.
Here's the way I see it: if Bell and Rogers are combining to do anything, that should be opposed on principle as adverse to the public interest, given the combined concentration/market power of the two entities.
Let the agonies over massive debt service begin.
"There are some people who might have better technique than me, and some may be fitter than me, but the main thing is tactics. With most players, tactics are missing. You can divide tactics into insight, trust, and daring." - Johan Cruyff
LOL, little late for that. The Kent Commission heard extensively in 1980 what would happen if media concentration took place, and like all things driven by money, it had no consequence.
Public impact is only widely considered when the public feels insecure and politicians, as a consequence, do also.
When the average household income is over $55,000 a year nationally ($80,000 in Alberta) -- regardless of how much is actually serving debt -- people have a hard time getting behind issues of broad social consequence, because they don't REALLY affect their personal sense of security. It's much easier to accept a slightly reduced service, as well, once everything has been "tiered" into a broad enough variety of price ranges to appeal to most income levels.
It's a constant re-leveraging of how much the public is willing to take in terms of increased cost (from the debt) versus reduced service (from servicing that debt) and the reality is, we're not even close to the threshold. Our cellphone bills could be five times what they are in the U.S. and we still wouldn't call for increased competition, because the relative low cost of the implement -- the phone -- and the service balanced over the course of a month means people can still bare it.
You're right, they should do what's in the public interest. But with respect to business and government, I expect we'll see that about as quickly as we see dry-holers disappear from the venture capital market; most people are too distracted by life to care about things that don't really hurt them (even if they may hurt others or have long-term negative consquences.)
^ Canadians used to believe in regulated monopolies, Ma Bell, Mother Hydro, AGT, and so on. Then we were sold this idea of competition and now what we have is niether. But you're right, as long as most of us can afford what we want we don't care.
From John Shannon....
Edit: I see ensco already got the news out.Competition Bureau sends a No Action Letter to Bell and Rogers saying it will not stand in the way of their purchase of MLSE.
It's not done yet.
Pretty disappointing to me to see that the CSA wrote a letter supporting the takeover. That smells bad. How a decrease in competition for bidding for Canadian soccer rights is good for the CSA, is beyond me.
http://www.thestar.com/business/arti...dent-operators
"There are some people who might have better technique than me, and some may be fitter than me, but the main thing is tactics. With most players, tactics are missing. You can divide tactics into insight, trust, and daring." - Johan Cruyff
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