Sinclair to Buy Fox Regional Sports Networks From Disney for $10.6 Billion
Walt Disney agreed to sell the channels to get regulatory approval for its $71.3 billion acquisition of large parts of 21st Century Fox.
TV station giant Sinclair Broadcast Group has struck a $10.6 billion deal to acquire 21 regional Fox Sports networks that Walt Disney agreed to sell to get regulatory approval for its $71.3 billion acquisition of large parts of 21st Century Fox.
Sinclair said Friday it will acquire the RSNs via a newly formed, indirect wholly owned subsidiary of Sinclair called Diamond Sports Group and Byron Allen will become an equity and content partner. Allen, who bought the Weather Channel last year, is the founder and CEO of Entertainment Studios.
Sinclair said the purchase price was $9.6 billion, though the deal is valued $1 billion more than that when enterprise value is thrown in.
The acquisition will make Sinclair, based in the Baltimore suburb of Hunt Valley, Maryland, and a major provider of news, a big player in sports cable programming. Among the sports channels it is buying are Fox Sports West in Los Angeles and Fox Sports San Diego. Sinclair owns, operates and/or provides services to 191 TV stations in 89 U.S. markets.
"While consumer viewing habits have shifted, the tradition of watching live sports and news remains ingrained in our culture," said Sinclair CEO Chris Ripley.
A 22nd of the regional channels that Disney agreed to sell, Yankees Entertainment and Sports (YES) Network, is not part of this deal. But Sinclair and Amazon are believed to be nearing a deal to back the New York Yankees baseball club in a roughly $3.5 billion deal to buy back the 80 percent stake in the YES Network that Disney holds after its Fox acquisition.
Regulators argued Disney's ownership of ESPN and the regional channels would give the Hollywood conglomerate too much power in the sports TV sector, requiring it to sell the regional networks.
The price tag Disney fetched came in below original expectations. Some Wall Street analysts had initially predicted that the 22 sports networks overall could yield up to around $20 billion, but there was limited competition in the auction. Private equity firms Apollo Global Management, KKR and Blackstone Group were understood to have been among the other suitors.