The deal that will reshape the ownership landscape of professional sports in Toronto is one step closer to becoming official.

The federal Competition Bureau said late Wednesday afternoon it will not challenge BCE Inc. and Rogers Communications’ joint purchase of Maple Leaf Sports and Entertainment.

But it also made clear that it has heard “a number of serious concerns” about the deal. For that reason, the bureau will keep a close eye on the outcome of the deal for one year, and could still bring matters before its tribunal.

The announcement from the federal agency raised eyebrows among some observers, as well as questions over whether other providers – and their customers – will get equal and affordable access to sporting events.

“The Competition Bureau doesn’t pull the trigger very often. In that sense, I’m not surprised,” said professor Mihkel Tombak, of the Rotman School of Management at the University of Toronto.

“They have kept the door open in the sense that they will keep an eye on the situation over the next year. The problem is the damage to competition could already be done by the time they act.”

The powerhouse deal, worth $1.32 billion, gives Rogers, which already owns the Blue Jays, part ownership of the Maple Leafs hockey team, Raptors basketball team, the Toronto FC in soccer, as well as the Toronto Marlies hockey club.

It also gives Rogers and BCE a control over a massive real estate portfolio that includes the Air Canada Centre and the Maple Leaf Square condominiums.

But more than property and sports teams, the deal is about the rise of laptops, smartphones, and tablets – and the lucrative business of providing content for those high-tech devices.

The question is whether other service providers would face increased charges, or whether would be cut out of the loop entirely, when it comes to providing access to sporting events to their customers.

“If other networks want content and they get charged higher prices for it as a result, that could be damaging. Consumers would end up paying more to view it,” said Tombak who specializes in technology strategy and policy.

Independent tech analyst Carmi Levy said “BCE and Rogers would behave aggressively at their peril.” The two companies have too much at stake, among consumers and the increased scrutiny of the competition bureau, to put smaller rivals at a disadvantage, he said.

Telus “would prefer to abstain from commenting on the issue,” a spokesperson said in an email.

The Competition Bureau did not say whether rules would be implemented regarding the sharing of content.

“That’s familiar territory for these telecom giants. There could be what’s called a vertical squeeze: The price goes up for the content for all the other television networks,” Tombak said.

Offering content to other providers for a fee would likely serve as another revenue stream for Rogers and BCE, said Richard Powers, also a professor at Rotman.

“The extent to which they control the content now is quite amazing – the Jays, Leafs, Raptors, Marlies, Toronto FC. The Competition Bureau must have felt it did not prejudice other providers but it’s hard to imagine that it won’t,” Powers said.

“The acquisition secures on a long-term basis access to TV, mobile, digital online and radio broadcast rights for both Bell and Rogers to MLSE’s sports teams,” according to a released issued by Bell, BCE’s telecommunications unit.

“Bell’s investment in MLSE is part of its strategy to deliver Canada’s best content across world-leading broadband networks to any screen customers may choose.”

The investment advances “Rogers’ strategy to deliver highly sought-after content anywhere, anytime, on any platform across its broadband and wireless networks and its media assets, while strengthening the value of its sports brand, Sportsnet,” Rogers said in a release.

In December the rival communications companies pooled their money and paid $1.3 billion to buy a 75 per cent stake in MLSE from the Ontario Teachers’ Pension Plan.

But the entire sale was subject to the approval of the competition board, which decided to allow the deal to proceed.

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In the interim, Rogers and MLSE had already moved forward with a cross promotional campaign, plastering the Air Canada Centre with billboards advertising Blue Jays gear for sale at Real Sports, MLSE’s flagship apparel store.

The Competition Bureau sent the telecom giants a “No Action” letter, indicating that it does not intend to take any action to block the deal.

But it could still bring matters before its tribunal if it sees red flags in the year it will continue to monitor the deal.

Other industry players are concerned about the effect of increasing concentration and vertical integration – where companies that create content also own the distribution channels used to get it to viewers – will have on consumers, the Bureau said in a release.

“The Commissioner is actively reviewing these concerns and will not hesitate to take action should she determine that there has been a violation of the Act,” the Bureau said.

Levy said the fluidity of the ruling speaks can be a positive.

“Because the deal breaks new ground, there is no framework in existence. BCE, Rogers, and the Competition Bureau are kind of making it up as they go along – which isn’t necessarily a bad thing,” Levy said.

“The media landscape and the Internet and the mobilization of content are changing. It’s a healthy process for everyone to be asking questions and it’s healthy for the Competition Bureau to weigh in with its assessment and give all stakeholders more time to figure out what needs to be done.”

The alternative would have been to give the deal a green light, with certain modifications.

For example, when Cineplex Galaxy struck a deal in 2005 to buy Famous Players for $500 million, the Competition Bureau stipulated that the company sell 35 theatres to third parties.

“I hope that people who do feel aggrieved by this do step up and make it known to the Competition Bureau. If they have a grievance, Canadians should speak up more,” Tombak said.

In the meantime, Maple Leafs Chief Operating Officer Tom Anselmi welcomed the move.

“We are very pleased with this outcome, given this was one of the important milestones in the sale process. The transaction is still expected to close mid-2012 after CRTC (Canadian Radio-television and Telecommunications Commission), NHL, NBA and MLS approval.”

With files from Kevin McGran

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