With little competition to buy the nets, Fox could buy the RSNs back for less than they sold forGETTY IMAGES
Fox is the "leading contender to buy back the RSNs it 'sold' to Disney" as part of the larger Disney-Fox acquisition, according to sources cited by Alex Sherman of CNBC. Formal offers for the RSNs "haven't come in yet." Sports Business Journal's John Ourand reported earlier this month that Disney "only recently sent out its bid book to prospective buyers." A deal with Fox would be a "cleaner outcome for Disney than selling the networks piecemeal, which would bring in smaller buyers and private equity firms." The DOJ "forced Disney, which owns ESPN, to sell the networks to alleviate concerns about too much sports programming power in the hands of one company." In fact, the networks "might never even change hands, depending on when" Disney's larger deal for Fox closes. Winning back the RSNs "would be a coup" for Fox Exec Chair Rupert Murdoch, who "could get the RSNs at a lower price than the value at which he sold them to Disney." If Fox ends up with the RSNs again, "part of the reason will be that no other large pay-TV distributor -- Charter, AT&T, Comcast or Dish -- saw value in owning the networks." While Sinclair Broadcasting Group CEO Chris Ripley has "discussed making an offer for the networks with private equity support, it would need quite a bit of help." It is "still unclear how much New Fox is willing to spend on the networks -- or what Disney values them at." But what is "clear is that Disney needs to sell them." Meanwhile, it is "possible Google, Amazon or another technology company would eventually be interested in the networks for the sports rights" (CNBC.com, 10/26).
BARGAIN HUNTING: CNBC's Sherman said Disney originally had "agreed to buy this bundle of Fox assets that included the 22 regional sports networks and a bunch of other stuff" for about $52B. By the time the "bidding war with Comcast was over, Disney had agreed to buy that same bundle of assets" for $71B, so the valuation of the RSNs "increased by a lot because they were a part of that bigger bundle." Now that Disney is "stripping off" the RSNs, it "isn't going to get that same list in valuation because, frankly, the regional sports networks are not a crown jewel asset." Sherman: "Comcast didn't really want them, Disney didn't really want them, and Fox was willing to sell them. So, you're not going to get that same bidding war around just RSNs. That's why Fox could actually buy them back for a lower value" (CNBC.com, 10/26).
ONLY REAL OPTION: DEADLINE.com's Hayes & Chmielewski wrote New Fox "makes the most sense of any potential buyer, mainly for the reason that no one else would have the cash, wherewithal, regulatory path or incentive to shell out billions for the entire string of networks." The RSNs are "considered beachfront property in the media business given that they air thousands" of NBA, NHL and MLB games a year as well as "high-profile college games." The RSNs would "complement the Fox broadcast networks and all-sports cable operations FS1 and FS2, just as they did before the Disney deal" (DEADLINE.com, 10/26).
