Sat. Sep 22nd, 2018

Disney Could Sell off Fox RSNs Piecemeal

John Ourand of Sports Business Journal was on the company’s The Morning Buzz Podcast earlier this week talking about the sports implications of Disney’s purchase of 21st Century Fox’s entertainment assets. As previously reported, the DOJ has agreed to approve the deal providing Disney sells off Fox’s regional sports networks.

Speculation has mostly focused on who would buy all 22 networks, but Ourand says that Disney may have more options and make more money of they sold them off one-by-one or in multiple smaller packages.

“Comcast wants the ones in its markets, AT&T wants the ones in its markets. Some distributors, like Charter, already have said that they’re interested in doing it. Venture capital could be out there looking at it, and then you have these deep-pocketed companies like Endeavor and CAA that have been looking to get into the media, that have been consistently building out their media groups. So I think there’s going to be a long line of people that are kicking the tires on these RSNs.”

Andrew Bucholtz of Awful Announcing suggests that it may not be limited to network and cable operators that have interest in the FOX RSNs.

Tech companies could perhaps get involved as well. YouTube has already done that with their efforts in the LA market, including grabbing LAFC local rights, and they and other tech firms could be players here.

As previously reported, it’s likely Disney will be looking for buyers for only 21 of the 22 networks. The New York Yankees intend to buy back controlling interest in the YES Network from Fox before the sale to Disney is complete.

Ourand went on to say that he worries the interest Disney is hoping exists for these RSNs isn’t actually there. Ourand says RSNs are no longer the reliable profit generators they used to be for cable companies. He cites cord cutting and rising rights fees.

You’re seeing this happen in Chicago right now. Comcast is losing subscribers in Chicago, but they’re having to renew rights fees in negotiations with all four teams, and all four teams want a lot more money, because they’re seeing teams across the country get a lot more money, and Comcast doesn’t even really have that money, because they’re losing subscribers. The whole business is changing.

It’s important to note a couple of things here. First, the sale of these assets to Disney is not even completed yet. Comcast still has time to up its own bid and come out on top. It is likely that the DOJ would still demand that Comcast sell off the RSNs. Disney may be interested in selling off all the RSNs but the ones in the LA market.

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