“New Fox,” the company that will be left over after Disney’s $71.3 billion deal for much of 21st Century Fox, could end up buying back the regional sports networks that are part of the deal.
According to CNBC, Fox is the current frontrunner to buy back all 22 RSNs, which broadcast games for 44 teams from around the NBA, NHL, MLB and more. The report comes after The Information reported that Fox was interested in buying the RSNs.
Disney got the Justice Department’s blessing to go ahead with its deal for Fox but only on the condition that it divested Fox’s RSNs. The DOJ is giving Disney a minimum of 90 days (with the possibility of extending the deadline by another 90 days) after closing the Fox deal to secure a sale of the RSNs.
The possibility of selling all 22 networks back to Fox presents a much neater solution for Disney than seeking out buyers potentially on an individual basis. The networks, which are valued at approximately $20 billion, have rumored suitors including Sinclair, Amazon, YouTube, AT&T and Charter along with several venture capital firms.
Comcast, which engaged in a short bidding war with Disney this year over Fox, had also agreed to divest the RSNs if it were to buy Fox. Comcast of course didn’t win in its bid to buy Fox, but it did manage to snatch away European pay TV operator Sky, of which Fox owns 39%.
For Fox, keeping the RSNs would make sense as the company post-Disney deal looks to align itself mostly with news and sports. For Disney, the sale of the RSNs, along with what it will make when Fox sells its share of Sky to Comcast, reduce the overall cost of its Fox deal by about $35 billion.
Disney said that it intends to funnel those savings back into its direct-to-consumer streaming products that include ESPN+, a majority stake in Hulu and the upcoming Disney-branded streaming service.
“Along with the net proceeds from the divestiture of the RSNs, the sale of Fox’s Sky holdings will substantially reduce the cost of our overall acquisition and allow us to aggressively invest in building and creating high-quality content for our direct-to-consumer platforms to meet the growing demands of viewers,” said Bob Iger, chairman and CEO of Disney, in a statement.