The city of Toronto and all of Canada are still basking in the afterglow of the Raptors’ first championship title and while the team’s collective ownership is set to benefit from the upgrade in status for the Raptors both in the NBA and across the country, the windfall for part-owner Rogers Communications (Rogers Communications Stock Quote, Chart TSX:RCI.B) is really peanuts stacked up against the monstrous telco revenues it pulls in on a monthly basis.
Even so, portfolio manager David Baskin says our growing need for bigger and better wireless plans is likely to feed Rogers’ bottom line for years to come.
“The fact of the matter is that we’re all using more data on our portable devices and that’s only going to grow. And as that happens, [Rogers, BCE and Telus] are going to make more and more money on our data plans,” said Baskin, president of Baskin Wealth Management, to BNN Bloomberg on Tuesday.
“So, yes, this is a good time to buy Rogers,” he said.
Earlier this year, the Raptors were listed as 11th place on Forbes’ list of NBA basketball teams with a value of $1.7 billion, but they’re sure to jump higher on the NBA title win. That’s good news for Raptors parent company Maple Leaf Sports and Entertainment, which is owned by Rogers, BCE and MLSE Chairman Larry Tanenbaum. But the impact on Rogers and Bell will be minor, said Baskin.
“I would say that the sports part of Rogers is primarily a distraction. If [the Maple Leafs] happened to win the Stanley Cup, it would move the needle, but other than that it’s kind of, meh,” said Baskin.
“Their revenues are so gigantic that even when you look at the ticket prices from a full arena and the extra advertising that they sell, it’s just not that much revenue compared to how big those companies are,” he said.
Rogers last reported its quarterly earnings in April where it generated net income of $391 million or 76 cents per share for the quarter ended March 31 on revenue of $3.59 billion. Analysts were expected a profit of 94 cents per share and revenue of $3.72 billion.