It made a lot of sense for Disney to want to add Fox’s chain of regional sports networks to its portfolio, adding to the power and scope of ESPN ahead of the launch of a sports streaming service. To the Justice Department, it made all too much sense, and as Disney moves closer to the $71.3 billion purchase of a big chunk of 21st Century Fox, part of the deal is now an agreement to divest from the 22 regional networks.
Given that those RSNs were valued (by a firm not totally disinterested in the proceedings) at $22.4 billion as a package, more than 30% of the total deal, there is an interesting situation ahead should Disney’s purchase go forward. In a 90-day period to divest, how much would Disney be able to extract from the very few potential purchasers, all of whom are either straight-up rivals of Disney or involved with the company in some kind of business already?
The only other chains of RSNs in the game are AT&T, Comcast, and Spectrum – all of which operate pay-TV systems, with Comcast standing out not only for its pursuit alongside Disney of the Fox assets, but for NBC Sports Network’s national competition with ESPN.
Would Disney’s best move to be to try to sell all 22 as a package? Or would it make more sense to try to break up the assets? In New York, for instance, might the Madison Square Garden Company have an interest in getting Yankees games back under its umbrella with the YES Network, or at least drive up the price of it for one of the three nationals? Is there a premium to be paid for Prime Ticket, home to the Angels, Clippers, Ducks, and Kings? At the same time, some of the Fox networks are interconnected – Fox Sports Oklahoma has Thunder games, while also taking Rangers and Stars coverage from Fox Sports Southwest, while Fox Sports Kansas City, the television partner of the Royals and Sporting KC, gets Thunder games from Fox Sports Oklahoma and Blues games from Fox Sports Midwest, which in turn brings Sporting KC action to the St. Louis area. What’s more, multiple Fox Sports channels currently get college football games from ESPN Plus. It’s a tangled web they weave, as they practice to… ah, there’s some word that finishes that phrase.
There’s still a lot to come in this deal, but one thing that should be assured is that some very rich people are going to get much richer, and when it’s all said and done, your TV bill is going to go up. Meanwhile, millions of people in southern California still can’t watch Dodgers games on television because Spectrum cannot come to an agreement with AT&T to get SportsNet LA on DirecTV.
This is the fifth year of that blackout, which makes it hilarious that the Department of Justice decided to step in and wag a finger at Disney over the purchase of regional sports networks, when the second-largest market in the country shows perfectly well that when television distributors own television networks, their business animus can leave consumers – who often do not have multiple choices for TV providers – in the lurch.