Kukla's Korner Hockey

Kukla's Korner Hockey

The Financial Picture Of Quebecor

07/23/2015 at 8:52am EDT

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.

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

From breaking news to in-depth stories around the league, KK Hockey is updated with fresh stories all day long and will bring you the latest news as quickly as possible.

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