Rogers Communications (RCI.B) Operational Quality Rating (B) | 2025 Old York Registry
(B) | National Oligopoly | Wireless, Cable & Sports
By: Old York Financial
A Private Principal Report
the verdict
Old York Financial has assigned Rogers Communications (RCI.B) an Operational Quality (B) Rating.
Rogers is the dominant player in the Canadian telecommunications triopoly, but it is currently a "Leveraged Vassal." To acquire Shaw, Rogers took on a mountain of debt that has pushed its leverage to 3.9x and its ROIC into the low single digits. While the 2025 results showed a "Blue Jays World Series" bump and record wireless margins (67%), the buy back factor is a major fail: share count has increased by over 40 million (~8%) since 2020 to fund their ambitions. They are building a fortress, but the current owners are paying for it with dilution.
the old york analysis
owner earnings: the sports & steel tax
Rogers is a cash cow, but it’s a cow that requires an immense amount of "Maintenance Feed" (CapEx) to stay alive in the 5G era.
2025 Total Revenue: $21.71 Billion (CAD)
2025 Net Cash from Operations: $6.06 Billion
(-) Maintenance CapEx: ($0.85 Billion) Note: Estimated sustaining portion of the total $3.7B CapEx.
(+) Depreciation & Amortization: $4.85 Billion (Estimated)
OLD YORK OWNER EARNINGS: $10.06 Billion
Analyst Note: On an "Owner Earnings" basis, Rogers looks like a powerhouse. The problem is the $1.7B in Finance Costs (interest) and the massive "Growth CapEx" required to integrate Shaw and build fiber.
monopoly characteristics
The Canadian Moat: Rogers, Bell, and Telus operate a functional oligopoly. Their pricing power is high, but regulated.
The Content Flywheel: Rogers owns the Toronto Blue Jays, the stadium, and a massive stake in MLSE (Maple Leafs, Raptors). They don't just sell the data; they sell the reason people buy data. This is a unique "Sovereign" trait that their tower peers lack.
operational efficiency
ROIC: 4.8% (Fail). The Shaw merger "bloated" the balance sheet. Until they can extract the $1B+ in promised synergies, they are a sub-hurdle business.
EBITDA Margin: 45.2% (Consolidated). Their Wireless margin of 67% is elite, but the Media and Cable segments drag the average down.
Capital Velocity: Very slow. Telecom is the opposite of "Asset Light.”
the fortress check
The Cannibal Factor (FAIL): 2020 Share Count: ~500M. 2025 Share Count: 540M. Rogers is an issuer, not a cannibal. They recently closed a $7B equity-linked transaction, this is the definition of dilution.
Net Debt to EBITDA: 3.9x. Management is bragging about getting this down from 4.5x, but in our Yardstick, 3.9x is still "High Fragility" for a (B) rating.
why it’s rated (B)
High Interest Burden: They are currently working for the banks. A huge portion of their operating income is diverted to servicing the Shaw acquisition debt.
Regulatory Risk: The Canadian CRTC is constantly pressuring them to lower roaming rates and open their networks to competitors.
Dilution History: A "Sovereign" would have found a way to buy Shaw without printing 40 million new shares.
final determination
Rating: Old York Quality (B)
Classification: The National Utility.
Rogers possesses one of the best asset collections in North America (Media + Telecom), but the Principal’s Math doesn't lie. They are a (B) because they are currently a low-ROIC, high-debt, diluting entity. Once the leverage drops below 3.0x and they begin retiring shares, we can talk about a promotion.
Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager.
