Toronto Star: Competition bureau to allow Big Telecom's sports and entertainment buy

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Two of Canada's biggest telecom giants, Bell and Rogers, may soon be acquiring Maple Leaf Sports and Entertainment together. These companies are already very large and vertically-integrated—each own a great deal of content as well as the pipes it flows through—which gives them incentive to hoard content from independent providers and engage in related anti-competitive behaviour.

Article by Madhavi Acharya-Tom Yew and Morgan Campbell for the Toronto Star:

The deal that will reshape the ownership landscape of professional sports in Toronto is one step closer to becoming official.

The federal Competition Bureau said late Wednesday afternoon it will not challenge BCE Inc. and Rogers Communications’ joint purchase of Maple Leaf Sports and Entertainment.

But it also made clear that it has heard “a number of serious concerns” about the deal. For that reason, the bureau will keep a close eye on the outcome of the deal for one year, and could still bring matters before its tribunal.

The announcement from the federal agency raised eyebrows among some observers, as well as questions over whether other providers – and their customers – will get equal and affordable access to sporting events.

“The Competition Bureau doesn’t pull the trigger very often. In that sense, I’m not surprised,” said professor Mihkel Tombak, of the Rotman School of Management at the University of Toronto.

“They have kept the door open in the sense that they will keep an eye on the situation over the next year. The problem is the damage to competition could already be done by the time they act.”

The powerhouse deal, worth $1.32 billion, gives Rogers, which already owns the Blue Jays, part ownership of the Maple Leafs hockey team, Raptors basketball team, the Toronto FC in soccer, as well as the Toronto Marlies hockey club.

It also gives Rogers and BCE a control over a massive real estate portfolio that includes the Air Canada Centre and the Maple Leaf Square condominiums.

But more than property and sports teams, the deal is about the rise of laptops, smartphones, and tablets – and the lucrative business of providing content for those high-tech devices.

The question is whether other service providers would face increased charges, or whether would be cut out of the loop entirely, when it comes to providing access to sporting events to their customers. Read more »

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