Rogers, Scotiabank Ink 6-yr NHL Deal - Analyst Blog

Recently, Rogers Communications Inc. RCI received its first major National Hockey League (NHL) sponsorship from one of Canada's leading banks, Scotiabank. The financial details pertaining to the 6-year agreement have been kept under wraps.

Per the deal, Scotiabank will hold the sponsorship rights for the Wednesday and Sunday night NHL games which will be telecasted by either Rogers Sportsnet or its City television stations. Moreover, the bank will have the scope to connect to customers through tablets, smartphones and PCs.

In Nov, 2013, Rogers had signed a 12-year broadcast and multimedia agreement with National Hockey League (NHL) for national rights to NHL games on all platforms and languages. The agreement has come into effect from the 2014-2015 session and will continue till the 2025--2026 one. Rogers will pay approximately $5.2 billion to NHL throughout the deal term.

NHL is highly popular in Canada. Thus, it is expected that the company will be successful in getting sponsorship for the TV broadcast of the games. Rogers is already in talks with several organizations for the same. As the advertisements displayed during the matches have considerable coverage, the company will able to generate significant revenues in the coming years. It is also believed that Rogers is also in talks with Canadian Tire Corp. Ltd. and Kraft Foods Group Inc. for the NHL sponsorships.

Rogers' cable operations are currently facing increased competition. BCE Inc.'s BCE foray into cable TV services is intensifying competition and may likely slash Rogers' market share and cap margin expansion. Moreover, Rogers' Media segment is getting affected by continued softness in the advertising market. We believe that much of the Media segment's growth is dependent on the strong viewership ratings of Rogers' radio and TV broadcasting operations.

Hence, we remain highly optimistic that the commencement of NHL games will certainly boost the company's Media segment, going forward.

Other Stocks to Consider

Rogers currently has a Zacks Rank #5 (Strong Sell). Other better-ranked stocks in the communications industry are Cablevision Systems Corporation CVC and Comcast Corp. CMCSA.  Both the stocks currently have a Zacks Rank #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
CABLEVISION SYS CVC: Free Stock Analysis Report
 
BCE INC BCE: Free Stock Analysis Report
 
ROGERS COMM CLB RCI: Free Stock Analysis Report
 
COMCAST CORP A CMCSA: Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research