Disney's Acquisition of Fox Approved, but Must Sell Off 22 Regional Fox Sports Networks

MacRumors

macrumors bot
Original poster
Apr 12, 2001
49,579
10,892



After months of scrutiny in an ongoing antitrust case, the United States Department of Justice today granted The Walt Disney Company approval to acquire 21st Century Fox's entertainment assets for $71.3 billion, on one new condition: Disney must divest 22 regional sports networks owned by Fox to an "acceptable" buyer. Removing these networks from the acquisition "would resolve the competitive harm" that has been previously raised in the antitrust lawsuit, the Department said.


If Disney did acquire Fox and the 22 regional sports networks, the original complaint argued that the proposed acquisition would "likely result" in multichannel video programming distributors paying higher prices for cable sports programming in the designated markets. This would also inflate television subscription prices in the process, the Department pointed out.

Now, Disney has agreed to sell the 22 networks to a buyer that the Justice Department deems "acceptable," rather than continue the ongoing merger investigation. After the acquisition closes, Disney will have 90 days in which to sell all of the designated networks to the buyer, otherwise the court will appoint a trustee to force the sale.

This will ensure a competitive market remains in place in each region, Assistant Attorney General Makan Delrahim explained.
"American consumers have benefitted from head-to-head competition between Disney and Fox's cable sports programming that ultimately has prevented cable television subscription prices from rising even higher," said Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division. "Today's settlement will ensure that sports programming competition is preserved in the local markets where Disney and Fox compete for cable and satellite distribution."
The specific regional sports networks in question include the following:

(i) Fox Sports Arizona, (ii) Fox Sports Carolinas, (iii) Fox Sports Detroit, (iv) Fox Sports Florida, (v) Fox Sports Indiana, (vi) Fox Sports Kansas City, (vii) Fox Sports Midwest, (viii) Fox Sports New Orleans, (ix) Fox Sports North, (x) Fox Sports Ohio, (xi) SportsTime Ohio, (xii) Fox Sports Oklahoma, (xiii) Fox Sports San Diego, (xiv) Fox Sports South, (xv) Fox Sports Southeast, (xvi) Fox Sports Southwest, (xvii) Fox Sports Sun, (xviii) Fox Sports Tennessee, (xix) Fox Sports West, (xx) Prime Ticket, (xxi) Fox Sports Wisconsin, and (xxii) the YES Network.
Disney is now believed to have surpassed the last major hurdle in the deal and should be nearing the end of the acquisition process, although regulatory approvals from other countries are still required. Competitive offers could also still appear, potentially from Comcast, although Fox has remained vocal about its preference for Disney to win its entertainment assets.

As outlined in the original announcement last December, these assets include Twentieth Century Fox Film and Television Studios and Fox-related cable and international TV businesses. Movie assets that would become Disney-owned include Avatar, X-Men, Fantastic Four, and Deadpool, and TV shows include The Simpsons, This Is Us, and The Americans. Disney would also get Fox's 30 percent stake in Hulu and become a majority owner of the streaming service.

Article Link: Disney's Acquisition of Fox Approved, but Must Sell Off 22 Regional Fox Sports Networks
 

opeter

macrumors 68000
Aug 5, 2007
1,715
620
Slovenia, EU
Interesting. So Comcast is out of the game or can still "mix the water"?

Competitive offers could also still appear, potentially from Comcast, although Fox has remained vocal about its preference for Disney to win its entertainment assets.
 

euvnairb

macrumors regular
Oct 13, 2010
194
143
Goleta, CA
Interesting. So Comcast is out of the game or can still "mix the water"?
I think Comcast is still in it. This simply states that the Disney offer is approved by the justice department. Comcast can still come in and outbid Disney and then they'd have to undergo similar scrutiny with the justice department (and other governmental organizations). I hope Disney wins this though -- because I want to see an xmen + avengers movie haha.
 
  • Like
Reactions: spinnyd

Kaibelf

Suspended
Apr 29, 2009
2,445
7,435
Silicon Valley, CA
Disney's majority stake in Hulu is what bugs me.
The sports networks being divested were a given since Disney already owns ESPN.
I actually disagree, because this makes it more likely that Disney won't pull their ABC properties from Hulu in favor of their own streaming service they have to build up now. Instead, it's more likely that the Disney kids stuff will be an add-on package and Hulu users won't have to deal with a CBS-style situation.
 
  • Like
Reactions: rjbenson83

maflynn

Moderator
Staff member
May 3, 2009
66,935
33,918
Boston
Interesting. So Comcast is out of the game or can still "mix the water"?
I think once Disney raised its offer to 71 Billion that basically pushed Comcast out. Not for nothing, but I can see Comcast buying those 22 affiliates and helping their nbc sports channel.
 

BuffaloTF

macrumors 65816
Jun 10, 2008
1,020
929
Sell them back to New Fox...?

They're keeping the national Fox Sports anyway. I was actually looking forward to this being part and maybe ESPN taking the TSN approach with regional coverage married up to the national.
 

ArtOfWarfare

macrumors G3
Nov 26, 2007
8,833
4,581
Seems probable that someone is going to get those 22 networks on the cheap.

Disney is required to sell them. I'm guessing Comcast will similarly not be permitted to have the channels since they already have their own sports channels. So that leaves the new Fox, which I don't think wants them (or else why would they be selling them?) and then just smaller players...

Unless maybe a big player who isn't in TV wants to move in on this? Someone from FAANG or Microsoft? Maybe AT&T or Verizon (or does Verizon already own their own sports networks?)
 

cmwade77

macrumors 65816
Nov 18, 2008
1,057
1,168
I think Comcast is still in it. This simply states that the Disney offer is approved by the justice department. Comcast can still come in and outbid Disney and then they'd have to undergo similar scrutiny with the justice department (and other governmental organizations). I hope Disney wins this though -- because I want to see an xmen + avengers movie haha.
Honestly, I doubt FOX would even entertain any bid from Comcast at this point unless it was something like double what Disney is offering.

I don't think Disney was ever interested in the FOX Sports side of things, they likely kept them in the mix so they had some wiggle room like this to make things easier to get approved.
 

cmwade77

macrumors 65816
Nov 18, 2008
1,057
1,168
Now Apple can scoop up the Fox Sports networks :)
I wouldn't be surprised if the DOJ says they are not an acceptable buyer due to their ties to Disney.
[doublepost=1530132450][/doublepost]
Disney's majority stake in Hulu is what bugs me.
The sports networks being divested were a given since Disney already owns ESPN.
Not really, we already know Disney wants to do their own streaming service, this deal with FOX just makes it more likely that it will just end up being Hulu and is actually a win for everyone but the cable companies.
 
  • Like
Reactions: Junior117

macduke

macrumors G4
Jun 27, 2007
11,030
14,844
Central U.S.
I hate monopolies but I'm pretty stoked about the MCU coming back together. I'm not even sure if this qualifies as a monopoly as entertainment is a bit different. At least Sony was smart enough to let them use Spiderman and share characters. I'd prefer Disney to own that too but whatever. I'm curious whether Disney will recast most, if not all of the X-Men characters.
 

bigjohn

macrumors 6502
Oct 1, 2000
442
26
Monrovia, CA
Seems probable that someone is going to get those 22 networks on the cheap.

Disney is required to sell them. I'm guessing Comcast will similarly not be permitted to have the channels since they already have their own sports channels. So that leaves the new Fox, which I don't think wants them (or else why would they be selling them?) and then just smaller players...

Unless maybe a big player who isn't in TV wants to move in on this? Someone from FAANG or Microsoft? Maybe AT&T or Verizon (or does Verizon already own their own sports networks?)
New FOX is a player. The FOX RSN that I work for has revenues of $1.2 billion per year. That's hard cash.

YouTube TV has it's own channel for LAFC, they might want a linear foothold, but it seems contrary to their current model. Same for Facebook, Amazon, Apple or Netflix.

Microsoft has been trying to get out of MSNBC, not sure it's a space they want to play in.

AT&T is a player, they offer internet/tv service in many markets that have RSNs and they don't have enough (3+) where adding a few more would make it noteworthy for the Justice Dept.

Verizon/Frontier doesn't have any sports networks. as of now.

It'll be interesting for sure.
 

BlueParadox

macrumors 6502
Sep 3, 2010
285
219
Melbourne, Australia
Interesting news... but what is there about it that relates to Apple in any way? How is this a MacRumor?
Probably because Apple is getting into the online streaming media business as is Disney, with the latter owning a massive movie and TV catalogue, as well as the prospect of a huge amount of new material :rolleyes:
 

campyguy

macrumors 68040
Mar 21, 2014
3,413
953
Those are some dusty old rings, it's been a while...
Agreed, but it's pretty bling. I miss the Steinbrenner days, got to see Thurman Munson's last game - I still have my memories. FWIW, I do root for the Sox. Good baseball is great baseball! Except for the Dodgers... Cheers, and not Bronx Cheers!
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.