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For BCE, a stake in the great Leafs-Habs NHL rivalry

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BCE, Rogers strike MLSE deal Canada's BCE Inc. is grabbing a stake in one of the National Hockey League's greatest rivalries.

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BCE and Rogers Communications Inc. announced today they're buying a majority stake in Maple Leaf Sports and Entertainment, having reached a deal with the Ontario Teachers' Pension Plan for control of the group.

Under the agreement to take up the stake held by the Ontario Teachers' Pension Plan, BCE and Rogers will together own 75 per cent of MLSE, the parent of the Toronto Maple Leafs, the Toronto Raptors, the Toronto FC soccer club and other assets.

Larry Tanenbaum will boost his ownership in MLSE to 25 per cent from his current 20.5 per cent, the companies said, and will remain chairman of the sports empire.

BCE said its cash commitment is $398-million, for 28 per cent of MLSE. A BCE trust for pension fund investments will kick in $135-million, giving the two 37.5 per cent. Rogers also ends up with 37.5 per cent, with a cash commitment of about $533-million.

The deal needs regulatory approval, as well as approval from the National Hockey League.

As The Globe and Mail's Grant Robertson and Tara Perkins write in today's Globe and Mail, the two telecommunications concerns will own the parent of the Toronto Maple Leafs, the Toronto Raptors, the Toronto FC soccer team and broadcast assets.

BCE already holds a stake in the Montreal Canadiens, which would mean the company owns a piece of the great Leafs-Hab rivalry.

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"There may be an issue with BCE owning a stake in both the Canadiens and MLSE, which owns the Toronto Maple Leafs, the Toronto Raptors, the Toronto Marlies, the Toronto Football Club and the Air Canada Centre," said analyst Dvai Ghose of Canaccord Genuity. "... However, others have told us that BCE would not have to sell its Canadiens stake as it would not control either hockey franchise under the scenario that has been put forward."

Mr. Ghose said in a research note that he sees both possible positives and negatives for BCE and Rogers, but "in summary we believe that the deal would not be overly material for BCE, RCI or the sector in general."

Referring also to Telus Corp. and Shaw Communications , he added that "while we see more value in owning content creators like MLSE than content aggregators, telcos and cablecos have never shown discernible value in owning sports franchises.

"We continue to prefer Telus' unwavering focus on telecom assets. Having said that, we believe that Bell and Rogers' focus on sports content is more enticing than Shaw's Canwest asset which has virtually no exposure to sports and seems much more susceptible to over the top video (OTT) risk."

Britain isolated in euro deal The entire euro zone and several other countries in the wider EU have signed on to a new fiscal pact aimed at easing the region's two-year-old debt crisis.

Britain was adamant it's staying out, as did some others, leaving a divided Europe in the wake of the EU summit in Brussels.

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As The Globe and Mail's Eric Reguly reports, they reached a deal aimed at ensuring fiscal discipline, but have made no ground on measures that would boost economic growth or bring down high unemployment levels.

China will play a role in all of this, and there's supposed to be more bailout money as well.

Markets generally rallied, though bond yields in Italy and Spain spiked again, suggesting all is not well.

"What Europe appears to be agreeing to may help over the longer run, but not in the near term and bullish ECB bond buying sentiment is likely way off base," said Derek Holt of Scotia Capital, referring to the fact that the European Central Bank is not going to step in with a bigger bond-buying program.

"In fact, I would think this may provide justification for the threatened ratings downgrades to follow and watch the peripheral yields in this context. Further, if stocks are rallying because they still think the ECB will crank up the printing presses – as several media outlets are implying by over-interpreting ECB President Mario Draghi's support for the agreement - then they're frankly not listening to Draghi's words about how it is outside of treaty bounds for the ECB to print money for the purpose of funding governments."

Canada slips back to trade deficit Canada's trade balance has fallen back into a deficit, with exports slipping and imports rising in October.

Exports slipped 3 per cent, while imports climbed 1.9 per cent, Statistics Canada said today, leading to a deficit of $885-million, compared to September's surplus of $1-billion.

Both prices and volumes of exports fell, a disappointing sign after three months of rising, led by industrial goods and energy. Imorts of machinery and equipment led the rise in imports, which hit a record high.

"Today's data suggest that the export boom seen in Q3 did not carry in to Q4, suggesting the pace of growth in Q4 is on track to slow from the heady pace of the prior quarter," said Emanuella Enenajor of CIBC World Markets.

"One encouraging sign, however, was the pick-up in machinery and equipment imports, suggesting that Canadian capital expenditures likely rose to start Q4, reversing the prior quarter's fall."

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