Introduction:
Although the telecommunications sector is currently out of favor, I have continued to invest in Rogers Communications. Recently, they provided me with another compelling reason to bet on them for the long term. I’ll delve into that shortly. For those who are not familiar with Rogers or are unsure of what the company is involved in, here’s a brief overview.
Company Overview:
Rogers Communications Inc. is a diversified communications and media company based in Canada. Founded in 1960 by Ted Rogers with the purchase of a single FM radio station in Toronto, the company has grown significantly over the decades. Today, Rogers is the largest provider of wireless services in Canada, with over 11 million subscribers. It also operates as a leading cable company and has a strong presence in broadcasting and sports entertainment.
Rogers offers a wide range of services, including wireless communications, cable television, internet, and telephony. The company is known for its innovative approach and commitment to providing high-quality products and services to Canadians.
Strategic Acquisitions:
Over the last couple of years Rogers has put a focus on growing their business starting in 2023 as they closed the purchase of Shaw Communications. This was a nice add to the company as it strengthened them in several ways.
- Expanded Market Reach: By acquiring Shaw, Rogers significantly expands its customer base and market presence across Canada.
- Enhanced Network Capabilities: The merger allows Rogers to leverage Shaw’s infrastructure, improving its network capabilities and accelerating the rollout of 5G services.
- Diversified Service Offerings: With Shaw’s assets, Rogers can offer a more comprehensive range of services, including cable TV, internet, and wireless communications, to a broader audience.
- Increased Competitive Edge: The combined entity can better compete with other major telecom players in Canada, such as Bell and Telus, by offering more competitive pricing and bundled services.
- Cost Synergies: The merger is expected to generate significant cost savings through operational efficiencies and economies of scale.
Now if that wasn’t a good enough reason to have highly consider Rogers as part of your portfolio they weren’t done there.
Rogers recently acquired Bell’s 37.5% ownership stake in Maple Leaf Sports & Entertainment (MLSE) for $4.7 billion, giving them a majority stake. This is highly profitable area of their business as sport teams values have continued to grow over the past decade.
- Enhanced Media Content: Rogers can now offer a richer array of sports content across its platforms, including Sportsnet and its wireless networks. This strengthens its position as a leading sports media company in Canada.
- Increased Advertising Revenue: With more sports content and events, Rogers can attract higher advertising revenues from brands eager to reach a larger audience.
- Synergies with Existing Assets: The acquisition complements Rogers’ existing sports assets, such as the Toronto Blue Jays and Rogers Centre, creating more opportunities for cross-promotion and integrated marketing.
- Fan Engagement: By owning popular teams like the Toronto Maple Leafs and Toronto Raptors, Rogers can enhance fan engagement and loyalty, which can translate into higher viewership and subscription rates.
- Strategic Partnerships: Rogers can leverage its majority stake to form strategic partnerships and collaborations, further expanding its influence in the sports and entertainment industry.
- Long-term Value Creation: The investment is expected to surface long-term value for shareholders by capitalizing on the growth potential of MLSE’s franchises and media rights.
At a time when many are exiting the sector, Rogers is giving investors strong reasons to stay invested. While competitors like Bell are selling off assets to reduce debt, Rogers is actively acquiring assets that should provide long-term shareholder value.
Disclaimer:
The content of this blog post is solely my own and represents my personal views. I have not received any compensation or incentives for the opinions expressed herein. Please conduct your own due diligence and consult with a financial advisor before making any investment decisions.
