It seems the long-running sale of the former Fox regional sports networks has finally come to a conclusion, but without any further twists this time. Last Friday saw Charles Gasparino of Fox Business report that Disney had come to a “handshake agreement” to sell the RSNs to Sinclair for “up to $10 billion,” but that report included the caveat that the deal could be off if another bidder (likely the Liberty Media–MLB bid, but possibly the a debt-laden “for the culture” BIG3 bid) made a better offer. Well, it seems the RSNs are still going to Sinclair, with Joe Flint of The Wall Street Journal reporting Thursday that they have now “struck a deal“:
TV-station giant Sinclair Broadcast Group Inc. has struck a deal valued at more than $10 billion to acquire 21 regional sports networks from Walt Disney Co., according to people familiar with the matter.The agreement is expected to be announced as early as Friday, the people said.…Sinclair Broadcast has separately partnered with the New York Yankees to acquire the YES Network, another of the networks once controlled by Fox, in a deal valued at $3.45 billion, people close to that deal said. That sale, which hasn’t been finalized, also includes Amazon.com Inc. as a partner.
It sounds like Sinclair may be paying slightly more than initially reported (“more than $10 billion” versus “up to $10 billion”), which could signal an extra bid from another company they then matched or beat, a change in terms or something else. But regardless of what happened there, this is still much less than the $20-22 billion the networks (including YES) were initially expected to go for. Of course, it’s been projected for months that they’d be sold for much less than that, so this isn’t necessarily surprising, but it’s still notable to see that low final price come through.One question ahead may be regulatory approval. Disney is selling off these RSNs as part of an agreement with the Department of Justice to let the overall Fox-Disney sale proceed, with the DOJ citing antitrust concerns if Disney owned both ESPN’s national networks and these regional networks. It will be interesting to see if the DOJ or the FCC have any concerns about Sinclair (the largest owner of broadcast TV stations in the U.S.) adding so many regional sports networks to their portfolio, presumably giving them a lot of leverage in carriage negotiations (especially in markets where they own a broadcast network and a RSN). And the FCC did already help to shut down the proposed Sinclair-Tribune merger last year. But the regulator also may not step in here; unlike Sinclair-Tribune, this is a concentration across different areas (local broadcast networks and RSNs) rather than a combination of local broadcast network chains, and Disney is already divesting these quickly and at a loss thanks to regulators’ antitrust concerns.If the deal does go through, Sinclair has just become a much bigger player on the U.S. sports scene. In addition to their local broadcast networks, they also control Tennis Channel and Stadium, and now they have 21 RSNs (22 if you count their minority interest in YES) to add to that mix. And they have another new RSN launching next year, “Marquee” (based around the Chicago Cubs). We’ll see how they do with rights deals and with carriage negotiations and if they can make these RSNs work for them, but they’re certainly going to be a much larger presence in U.S. sports going forward.[The Wall Street Journal]