Disney’s Department of Justice-mandated sale of Fox’s regional sports networks has produced discussion of a whole lot of interesting potential bidders, from cable providers like Comcast through agencies like CAA through tech firms like YouTube and Amazon, private equity companies, and companies like Sinclair that own local broadcast networks, through teams involved in the RSNs (like the Yankees with YES). And now, as per Jessica Toonkel and Tom Dotan of The Information (subscription required), it sounds like Fox itself may even be interested in buying the RSNs back:
Executives at Fox have discussed the possibility of buying back the collection of sports channels from Disney, recombining them with what will be left of Rupert Murdoch’s entertainment empire after the Disney deal, according to three people familiar with the matter. Industry executives say the channels could fetch between $15 billion and $20 billion.
It is curious to think that Fox would sell these RSNs and then buy them right back, but the timing may be a factor there. The RSNs were certainly a compelling part of the purchase for Disney given the possible synergies with their own sports interests like ESPN. And by the time the DOJ nixed that part of Disney’s larger deal for Fox assets in exchange for signing off on the rest of it, the process of getting approvals from other U.S. and international governing bodies was already well underway. Given that this deal still isn’t expected to close until the first half of next year, Disney may have found it easier to just stick with the deal as written to avoid delaying the timeframe further, rather than renegotiate and alter its filings.
Beyond that, as Toonkel and Dotan write, another possibility is that this auction was an easier way to determine the actual value of the RSNs. That value changes pretty dramatically depending on who you ask; the $15-20 billion estimate there is a 33 percent swing, and there have been some even higher estimates suggesting they could be worth up to $22 billion. A renegotiation would likely see Fox lobbying for a more inexpensive valuation and Disney lobbying for a higher one (reducing their price paid); putting these up openly provides more information on the RSNs’ actual market value.
At any rate, this is far from “Fox is buying back its RSNs” at this point. The reporting here is just that Fox executives are discussing it, and executives discuss a lot of things. And the piece includes that “there’s no guarantee Fox will proceed to make a bid or that it would be successful.” And this would be a rather dramatic course change from Fox’s shift to focusing on a narrower array of properties, which is what prompted the sale of many of their assets to Disney in the first place. But it’s definitely interesting that Fox executives are talking about it, and that one entrant in the race for these RSNs might be their former owner.