The Competition Bureau has given a green light to BCE Inc. and Rogers Communications Inc.'s deal for a majority stake in Maple Leaf Sports & Entertainment Ltd., but has also sent a strong warning that it is keeping an eye on the sector.
The two telecommunications giants struck a $1.3-billion agreement in December for a 75 per cent stake in MLSE, owner of the Toronto Maple Leafs, Toronto Raptors and Toronto FC, with the aim of locking up the television rights for hockey, basketball and soccer for their sports channels.
While the agency said it has no plans to interfere with the deal at this point, it signalled that it is looking into concerns about the amount of concentration and "vertical integration" in the sector. Vertically integrated players such as BCE and Rogers not only create their own content, but also own the distribution networks that are used to get that content to viewers.
Over the past two years, vertical integration has increased dramatically, with Shaw Communications Inc. buying the former broadcasting assets of CanWest Global Communications Corp. and BCE acquiring CTV Inc. That has sparked worries among some industry players that the trend will have a harmful impact on consumers and some broadcasters.
"The Commissioner is actively reviewing these concerns and will not hesitate to take action should she determine that there has been a violation of the Act," the Bureau said in a press release.
The bureau said that while it does not intend to take any action to stop Bell and Rogers' purchase of the stake in MLSE at this point, it will watch to see what impact the deal has. The commissioner can challenge the deal for one year after it closes.
"We are pleased with this clearance today from the Competition Bureau and have crossed one more threshold as we move towards CRTC and sports league approvals for this acquisition. This is a good first step for us as we continue to work with Rogers to close the deal," Mirko Bibic, chief legal and regulatory officer for BCE, said in a statement.
He noted that the federal broadcast regulator has already held its own set of hearings into vertical integration.
"Assuming that these are the same concerns as the CRTC has raised, many have been addressed already. ... We will work with the regulators to address any concerns they have."