Should Rogers Sell the Blue Jays?

The Blue Jays are not big money makers, but sports team value appreciation has been rising. However, Rogers would be better off selling the Blue Jays.

Matthew Dolgin 6 July, 2023 | 1:42AM
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Matthew Dolgin: The question of whether Rogers (RCI.B) should sell the Blue Jays is a tough one. Sports teams generally, and we assume the Blue Jays for Rogers, are not big moneymakers. So, in the way that we would usually look at financial investments or financial performance, sports teams don't necessarily add to the results of these big public companies. On the other hand, sports teams' appreciation in the last few years as far as the value of what they sell for keeps going up and up and up.

So, in my view, the biggest question of holding onto the Blue Jays, or the reason to do it, is speculation that prices will continue appreciating. Overall, if I had to choose one side or the other, I'd say Rogers would be better off selling. We estimate that the Blue Jays are probably worth up to about $5 per share in Rogers' stock, and we don't think that's reflected in the stock. If Rogers were to sell the Blue Jays, their financial metrics would look quite a bit better, their valuation would look lower, their margins would be better, and they're not trading at any discount to their peers. So, we think the stock would probably rise, the company would be better off, and given the amount of price appreciation in sports teams, we're thinking an end to that rise might come soon. So, if Rogers could get $2.5 billion to $3 billion for the Blue Jays, we think it's probably worth a sale. But given the overall size, it's not a huge deal either way, and if they wanted to hold onto it, you just keep hoping for future appreciation. It's possible.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Rogers Communications Inc54.00 CAD-4.09
Rogers Communications Inc Shs -B- Non-Voting52.42 CAD-2.15Rating

About Author

Matthew Dolgin  Matthew Dolgin is an analyst with Morningstar

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