from Nelson Smith of The Motley Fool Canada,
Quebec City seems like a slam dunk expansion team. It’ll have deep-pocketed owners, as well as the goodwill surrounding professional hockey heading back to Quebec City. Add in the new arena, and there isn’t much the NHL can object to.
It also looks to be a great deal for Quebecor. Yes, the $500 million expansion fee is a steep price to pay, but having the rights to show every game will be a huge boost to the company’s sports channels. And let’s not forget about the opportunity to promote other Videotron services, including the company’s newest venture, wireless.
But should investors eager to invest in the NHL do it through Quebecor? That’s where things get a little more tricky.
The investment case for Quebecor
The first thing that concerns me about investing in Quebecor is its balance sheet. The company has more than $6 billion in total debt, compared to total assets of $9.3 billion. Intangible assets make up nearly $3.8 billion worth of the total assets.
Essentially, the company owes more than it owns if you exclude the intangible assets. That’s not good, especially considering how it would most likely have to borrow the $500 million expansion fee.
Create an Account
In order to leave a comment, please create an account.