Bell Media, Rogers Buy Toronto Maple Leafs In $1 Billion Deal

BCE Bell Canada and Rogers Communications joined forces to make a $1.2-billion bid for 80 percent stake in Maple Leaf Sports Entertainment, the two company announce in a joint press release. Rogers and Bell are leading Canadian telecommunications companies, while the target company is Canada’s largest sports conglomerate, in which the Ontario Teachers’ Pension Plan holds a majority stake.

MLSE Sold

The company’s assets include the richest hockey club in the world, the Toronto Maple Leafs, the Raptors basketball team, Major League Soccer’s Toronto team, the Marlies who play in the American Hockey League. In addition, the company owns the Air Canada Centre, two specialty television channels, and a condominium development adjacent to the arena.

The 80-percent stake would be split equally between the two bidders, with each of them purchasing 37.5 percent of M.L.S.E. The Ontario Teachers held an auction for M.L.S.E. but no deal was finalized for long time because no bidder was able to meet Ontario Teachers’ target price. Ontario Teachers accepted a deal only after the joint bid of BCE Bell Canada and Rogers valued the company at nearly $1.7 billion.

The deal, however, will be scrutinized by Canadian anti-trust authorities and a final approval is not expected before next summer.

The Maple Leafs is the most valuable asset of M.L.S.E., with Forbes valuing the team at $521 million on revenues worth $193 million and operating income of $81.8 million. Its valuation rose by 3 percent year over year, making by far the most valuable team in the N.H.L.

Stocks Opened Higher After Europe Deal

Stock markets welcomed the news on Europe’s plan to tighten budget rules within the European Union and U.S. stocks gained on Friday, with the Standard & Poor’s 500 Index adding 1 percent. EU leaders agreed in Brussels to increase the EU’s crisis-fighting fund by $267 billion and introduce stricter anti-deficit rules to fight continuing debt crisis in Europe.

US Stocks Rise

European Central Bank President Mario Draghi described the plan as “very good”, while Britain was not included in the new plan after the country decided not to join the newly introduced measures and refused to accept closer economic ties with other member states.

U.S. stock market was boosted also by better than expected figures on the U.S. trade deficit, which decreased by 1.6 percent to $43.5 billion in September.

Other leading U.S. stock indexes also rose, although the Dow Jones Industrial Average’s gain was limited by decreasing prices of DuPont shares. The index added 1.1 percent during early trading hours, while bank stocks led the gain, with Morgan Stanley adding 5.3 percent, and Citigroup Inc. increasing 4.6 percent. European stocks also rose following the news on a debt-crisis deal, with France’s CAC 40 gaining 2.5 percent, and Germany’s DAX adding 2 percent on Friday.

The new budget rules envisage a more active role for the European Central Bank, which is now allowed to purchase more government debt to lower borrowing costs for EU member states. Britain, not quite unexpectedly, opposed the plan designed by France and Germany, Europe’s leading economies, and asked the new rules not to apply to London. Other member states, however, did not accept Britain to be an exception to the rules, and London did not join the new budgetary policy framework.

U.S. Stocks Rally as Unemployment Rate Drops

U.S. stocks rose on better than expected data on unemployment, with major indexes gaining more than 1 percent on Friday. The U.S. jobless rate hit a two-and-a-half year minimum on Friday, while positive news on progressing talks on debt crisis in Europe fueled further U.S. stock market gains.

US Stocks

The Nasdaq Composite Index grew by 1.24 percent, to 2,658.79, followed by Standard & Poor’s 500 Index, which added 1.21 percent, and Dow Jones Industrial Average, which gained 1.01 percent. The unemployment rate decreased to its lowest level since March 2009, at 8.6 percent in November, according to a report by the U.S. Labor Department.

Financial stocks witnessed strongest gains, with Morgan Stanley and Goldman Sachs Group growing by 9 percent and 7 percent respectively. Citigroup jumped 5.2 percent and J.P. Morgan Chase added 6.7 percent on Friday.

Following today’s positive market development all three major U.S. stock indexes are back in black for 2011.

Positive news on debt talks in Europe helped local markets to close higher, with France’s CAC-40 going up by 1.4 percent and the Stoxx Europe 600 closing 1.1 percent higher.

Market analysts, however, question the ability of United States’ economy to sustain current employment growth, hinting that local private and public sectors would experience difficulties in creating new jobs at the same pace within the next few months.

American Airlines Files for Bankruptcy

American Airlines CEO Gerard Arpey resigned following an unanimous decision by the company’s board of directors to file for bankruptcy protection. Company president Thomas W. Horton replaced him at the helm of the company, announcing that travelers will not be affected by the bankruptcy procedure at this stage. Both American Airlines and its parent company AMR Eagle Holding Corp. are entering a procedure for bankruptcy protection, the board of directors said in a statement.

American Airlines Bankruptcy

The company continued to suffer from heavy loses in the past couple of years, failing to go back to black like other major U.S. airlines. American Airlines would not stop taking reservations and no flights would be canceled due to the bankruptcy reorganization. The flight schedule of the airline will undergo “modest” reduction, while many employees will be fired during the restructuring, Horton said.

According to him, the company’s filing for bankruptcy was driven by numerous factors such as rising fuel prices, global economic downturn, and growing payroll costs. In addition, AMR witnessed loses of $162 million in the third quarter of 2011, with loses being posted in 14 of the last 16 quarters.

At present, the company flies some 240,000 passengers a day, employing 78,000 people. According to the company’s balance sheets, it has some $4 billion in cash.

Stock Markets Sink Amid European Crisis

World stock markets experienced heavy losses on Wednesday but stocks in the United States and Europe posted moderate gains on Thursday, following news that Italy successfully placed offering of debt securities. Debt-burdened Italy managed to raise $6.8 billion in one-year securities at an average rate of 6.09 percent, marking the highest interest rate on Italian government securities since September 1997, before the country adopted the euro.

Stock Market Down

On Thursday, the British FTSE 100 index lost 0.65 percent of its value, with major German and French stock indexes losing less than 1 percent. Early trading in the United States saw the Standard & Poor’s 500 index futures adding 1.3 percent before going down to a 0.2-percent gain, while the Dow Jones industrial average added 0.4 percent.

On Wednesday, the S.& P. 500 index lost 3.7 percent following massive sell-off of Italian debt, which forced the markets down.
In the foreign exchange market, the euro rose slightly against the U.S. dollar, with deals being made at $1.3582 on Thursday from $1.3542 on Wednesday.

Investors in Europe and the U.S. welcomed news on positive developments in the North American labor market, where the number of people who filed for unemployment benefits continue to decrease even though at slower than expected pace. Market players are positive that a key Italian economic bill would be approved by the weekend, putting an end to growing costs of Italian government borrowing and resulting in Prime Minister Silvio Berlusconi’s resignation. Markets also welcomed the news that Greece appointed Lucas Papademos as its new prime minister.

Children Join Wall Street Protests

College students, young professionals, and union members joined “Occupy Wall Street” protesters in New York City and Washington D.C. The protest is unofficially headquartered in Zuccotti Park in NYC, near Wall Street, and protest organizers stage rallies and marches across major U.S. cities against a “corporate led U.S. government.” Protesters clashed with police on several occasions but the protest is largely a peaceful one.

Children Wall Street Protests

New York City Mayor Michael Bloomberg blamed protests for hampering tourism business in the metro are while he agreed protesters have valid grounds for raising some complaints related to the 2008 Wall Street bailout. The state of New York secures 13 percent of overall tax contributions from Wall Street-based financial companies, thus disrupting the day-to-day Wall Street business activities affects badly the tax income of the city.

Protesters tried to enter the National Air and Space Museum with security guards preventing demonstrators from storming the building by using pepper sprays. The crowd dispersed after a woman has been arrested outside the museum building.

A growing number of young people join the demonstrations, which now have spread nationwide with protest taking place at big cities at the West coast as well. Protest organizers take advantage of social media to reach younger people, using social networks like Facebook and Twitter to urge students and teenagers to join the marches against the rich.

Wall Street Protests Continue

Wall Street protests that began with a few dozen demonstrators three weeks ago in New York evolved in an organized protest involving union members and college students united under the slogan “Occupy Wall Street.” Protesters plan to move to Washington to showcase their political views that are aimed at liquidating economic inequality. In fact, protesters took part in “Occupy DC” as part of a growing movement against a corporate-run world where no protection is offered to the poor.

Wall Street Protests

Online fliers urging people to gather in New York and Washington to protest against economic inequality read “Stop the Machine! Create a New World,” while organizers ask protesters to act in a non-violent manner at Wall Street and other locations where the protests take place. The unofficial headquarters of the protest organizers is at Zuccotti Park where people gathered on Wednesday to peacefully show their anger.

Most of the protesters blame Wall Street for the growing number of jobless Americans and increasing economic inequality that widens the gap between rich and poor. Hundreds of college students in New York and Boston joined the protests, demonstrating their solidarity to a cause that condemns corporate control of government, asking questions about the growing costs of their higher education.

U.S. Stocks Flat at Open Thursday

U.S. stock index futures opened flat on Thursday following two days of growing U.S. stock market fueled by data on American labor market and European efforts to work out a working plan to save trouble-hit local banking system. U.S. labor market data signaled a positive trend after new claims for unemployment benefits stood below expectations while European Commission President Jose Manuel Barroso announced the EU policymakers are close to propose a coordinated recapitalization of banks to provide a solution to recent sovereign debt crisis across Europe.

US Stocks

Jean-Claude Trichet, the President of the European Central Bank, told journalists that the economic outlook remains subject to intensified downside risks, while high uncertainty undermines European leaders’ efforts to stabilize the region’s banking system. European equities were under pressure and helped the S&P 500 stock index gain momentum in the past two days. During the trading day, U.S. stock rose higher in volatile trading with the S&P 500 index gaining 0.4 percent on news out of Europe.

The market is expecting data on U.S. non-farm payrolls to be released on Friday with preliminary reports showing a return to growth after flat growth in August.

Groupon’s Revenue Numbers Worsen

Groupon posted a revised financial statement lowering its revenues to $393 million in the second quarter of 2011, compared to initial $878 million, according to its S-1 registration statement. In fact, the company shifted from a gross measure of revenue to a net one, losing some $400 million in revenue in the process.

Groupon Revenue Down

The news might jeopardize the company’s planned $750 million IPO and force market analysts to re-evaluate the company’s valuation, which now stands at $ 20 billion by more than a half. In addition, a second COO is leaving the company in less than a year with Margo Georgiadis returning to her previous employer Google. Earlier, Rob Solomon spend only two months as COO of Groupon, which also fuels rumors there is something wrong in the business model of the company, according to market analysts.

LivingSocial, Groupon’s closest competitor, is close to finalizing a $200 million IPO that will value the company at $6 billion and will give them a boost over competitors Groupon in case they are able finalize an IPO before Groupon. The the U.S. Securities and Exchange Commission (SEC) put Groupon’s IPO under scrutiny over its accounting practices, barring the company from going public until its accounting practices are put in compliance with the U.S. accounting standards.