Disney and Sinclair Sign $ 10.6 Billion Sports Network Agreement

But the Department of Justice has asked Disney to sell the networks for overall approval of the merger, saying adding these networks to ESPN would give it too much power and likely lead to higher prices for consumers.

The acquired networks include Fox Sports West / Prime Ticket (UCLA, USC, Los Angeles Chargers and Los Angeles Clippers), Fox Sports Detroit (Detroit Tigers, Detroit Red Wings, Detroit Lions, Detroit Pistons, Michigan State University and University of Michigan) and Fox Sports Florida (Miami Heat, Tampa Bay Buccaneers, Miami Dolphins, Tampa Bay Rays, Florida Marlins, University of Miami, Florida State University) and Fox Sports Ohio / Ohio SportsTime (Cleveland Cavaliers, Cincinnati Reds, University of Florida State of Ohio)).

Disney has reportedly sold one of the networks, the YES network, which is broadcasting 3.5 billion US dollars to the New York Yankees, to a collective including the Yankees, Sinclair and Amazon, the New York Times reported in March. .

Sinclair said he would pay $ 9.6 billion after adjusting for minority interests. The networks will be part of the new Diamond Sports Group subsidiary, which will receive Entertainment Studios CEO Byron Allen as equity and content partner.

The deal, which will require DOJ approval, "is a very exciting transaction for Sinclair," said Chris Ripley, chief executive officer, in a statement. "While consumer buying habits have changed, the tradition of watching sports and live news remains embedded in our culture.As one of the country's largest local news producers and As an experienced producer of sports content, we are ideally placed to transfer our skills to deliver and expand our focus on higher quality sports programming. "

Industry observers were expecting the price of networks to reach $ 20 billion. If these prices are right, the networks get a price lower than expected by analysts, said Tuna Amobi, Equity Analyst at CFRA Research.

"With regional footprints across several major US markets, RSNs are likely to get a much higher valuation, after a seemingly competitive auction that lasted several months and attracted several other potential candidates," he wrote. in a note to the investor Friday.

In any case, the stations will complement Sinclair's online tennis channel, Tennis Channel, which she acquired in 2016, and her 24/7 sports channel, Stadium, which airs and can also be viewed online. Amobi explains. Despite stressors such as cable cuts in "the pay-TV ecosystem," he said, "we're seeing a relatively stable double stream of revenue (subscription and advertising) that could be auspicious for Sinclair's long-term return on investment. "

This acquisition would likely mitigate the difficulties of Tribune Media, which sold 42 billion television stations to Sinclair after selling $ 3.9 billion. Ajit Pai, chairman of Federal Communications, had said the agency had "serious concerns" about Sinclair continuing to illegally control some stations that it would have to yield to gain approval for the deal .

This would have made Sinclair pass to 215 television stations; he currently has 191.