And the saddest guy in Canada today is….

News item: BCE and Rogers to buy MLSE for $1.3B

You might think that Jim Leech is the saddest guy in Canada today, now that OTPPB’s stake in the Leafs has been sold to BCE/Rogers. Mr. Leech might not have the best seats in the house any longer, but his pensioners made what appears to be more than $1B on their investment; so much for MLSE being an ego asset. OTPPB treated it like any other: when the time comes to sell and someone pays your number, you sell.

I think the title goes, unfortunately, to our man Jim Balsillie. It was about a year ago when we wrote that he should step up and swap some RIM shares for the Leafs (see prior post “Jimmy’s time has come” Dec 1-10). It wasn’t as though we shareholders didn’t know he had other interests beyond smartphones (see prior post “Make it Seven part 4” May 15-09).

At the time, he could have entered into a straight exchange of, say, 20.6 million shares of RIM ($63/share at the time) for the Teacher’s majority stake. By utilizing a 25 year exchangable structure, Jimmy could have deferred the capital gains tax as well. Teachers could have sold their new RIM shares to crystalize their gain on MLSE, and everyone’s happy.

Wouldn’t things be different today. Jimmy would still own ~8 million of his then 28 million RIM shares, but he’d also own the Leafs and have avoided $957 million in paper losses on his RIM stock. Heck, MLSE appears to have gone UP in value in the 12 months that have passed. Tinkering with the Leafs backup goalie situation would be much more fun than trying to figure out why the new Bold 9900 randomly resets itself every few days.

And, if the storyline out of Rogers and BCE is accurate, Jimmy could have sold the MLSE content rights to these same folks for $1B, recouping most of his investment. Which could then have been used to buy the Buffalo Bills and move them to Ontario….

Woulda, shoulda, coulda.

MRM
(disclosure – I own RIM)