Maple Leafs, Raptors Parent Nears Stake Sale at $8B Valuation
Maple Leaf Sports & Entertainment chairman Larry Tanenbaum is close to selling a share of his MLSE holdings to OMERS—a pension plan for 540,000 Ontario municipal employees—at an enterprise value of more than $8 billion, according to multiple people familiar with the process who were not authorized to speak publicly. It would be a record valuation for the sale of sports teams.
MLSE’s primary assets are the NBA’s Toronto Raptors, NHL’s Toronto Maple Leafs, MLS’ Toronto FC, CFL’s Toronto Argonauts and their respective venues. Tanenbaum owns 25% of MLSE; it is unclear how much of his stake he is selling.
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One potential issue with the transaction: Rogers Communications and Bell Canada, which control the other 75% of MLSE, have a right of first refusal to purchase any shares in the company. The deal still needs approval from the NBA and NHL.
The NBA, MLS, MLSE and OMERS declined to comment. The NHL and a representative for Tanenbaum did not respond to a request for comment.
NBA owners voted at the end of last year to allow franchises to accept investments from endowments, pension funds and sovereign wealth. The changes were touted by a handful of league owners, including Ted Leonsis of the Washington Wizards and Tanenbaum, according to multiple people familiar with the decision. Tanenbaum is the chairman of the NBA Board of Governors. The NHL was expected to follow suit and allow these investments as well.
The price marks a premium over Sportico’s 2022 valuations for the clubs. The Raptors ranked eighth in the NBA at $3.34 billion; the Leafs are the NHL’s most valuable team at $2.12 billion; and Toronto FC was fifth in MLS at $705 million.
The deal is the latest in a series of NBA and NHL transactions at hefty valuations. Earlier this month, Michael Andlauer reached an agreement to acquire the Ottawa Senators for nearly $1 billion. Jeff Vinik is selling a stake in the Tampa Bay Lightning to Arctos Sports Partners that implies a $1.4 billion control value.
The NBA’s Phoenix Suns ($4 billion) and Milwaukee Bucks ($3.2 billion) closed sales earlier this year, and last week, Gabe Plotkin and Rick Schnall agreed to buy Michael Jordan’s share of the Charlotte Hornets at a roughly $3 billion valuation. The league is poised to sign a new national TV contract over the next 12-to-18 months that will likely more than double the current deal, which is worth $2.7 billion a year on average.
In 1996, Tanenbaum invested in Maple Leaf Sports Holdings. Two years later, the Leafs merged with the Raptors expansion team, and both moved into their new home, Scotiabank Arena (formerly Air Canada Centre). His company, Kilmer Sports, increased its stake in MLSE from 20.5% to 25% in 2012 when the Ontario Teachers’ Pension Plan sold its 80% share in MLSE. Rogers Communications and Bell Canada acquired the other 75%, and the Leafs were valued at roughly $1 billion in the sale.
MLSE was an early adopter in the current trend of building a sports platform company with teams in multiple leagues, along with real estate and media holdings. Fenway Sports, HBSE, Kroenke Sports & Entertainment and Haslam Sports have also built valuable multipronged sports empires.
Toronto FC won the 2017 MLS Cup, and the Raptors won their first NBA title in 2019. The Leafs have won 13 Stanley Cups—second most in the NHL—but have not won any Cups since 1967. The team continues to be a financial juggernaut though, with more than $300 million in revenue this past season, tops in the NHL.
OMERS had $92 billion (CA$124 billion) in assets at the end of 2022, making it one of the largest defined-benefit pension plans in Canada.
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