Thu. Jul 19th, 2018

Disney Forced to Sell Off RSNs in Fox Acquisition

Forget the idea that ESPN could spin the Longhorn Network into part of Fox Sports Southwest’s program offerings. The Department of Justice has agreed to let Disney’s acquisition of 21st Century Fox’s entertainment assets go through, providing that it sell off the 22 regional sports networks Fox currently controls. In a press release, the Department of Justice says Disney agreed to those terms.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the Southern District of New York to block the proposed acquisition.  At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit.  The Department said that without the required divestitures, the proposed acquisition would likely result in higher prices for cable sports programming licensed to multichannel video programming distributors (“MVPDs”) in each of the local markets that the RSNs serve.  To streamline agency clearance, Disney agreed to divest the 22 RSNs rather than continue with the Antitrust Division’s ongoing merger investigation.

The DOJ is only the first step. Other regulating bodies have to approve the deal before it becomes official.

So now the question in the sports media world is “who is the most likely buyer for the FOX RSNs?”. Well, Comcast, who put in a bid for the 21st Century Fox assets as well could be a player. Control of Fox’s RSNs would make Comcast America’s biggest RSN operator when combined with the 8 the company already owns. After the DOJ’s ruling on Disney though, it seems unlikely that it would allow a cable operator to own so many RSNs.

Another possibility could be AT&T, who may be interested in expanding their sports offerings. The company currently owns four RSNs after its acquisition of Time Warner.

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