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Disney and Sinclair Broadcast Group have officially closed their $ 21.6 billion transfer from 21 regional sports networks formerly owned by 21st Century Fox.
In order to finalize its $ 71.3 billion acquisition of most of Fox, Disney has agreed to sell RSNs to avoid monopoly issues, given the extent of its holdings in ESPN . The plan had been presented by the US Department of Justice in a consent decree last year, after Disney had avoided Comcast from winning in the auction for Fox.
After an RSN auction process, Sinclair, Byron Allen and private equity partners gained control of the networks with Fox College Sports. Networks, such as Fox Sports West, Prime Ticket, Fox Sports Ohio and others, remain powerful even in this difficult period for traditional television. They control the rights of 42 professional teams in all major sports, as well as important rights for university sports, and the nature of live sports viewing can mean very concentrated audiences and a steady stream of advertising dollars.
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At the same time, the RSNs also occupy a sometimes unstable ground, because the bouquet of pay television has become tense. In the same way that ESPN at the national level has shunned traditional subscribers while distributors are reluctant to pay ever higher taxes, local pay-TV operators have increasingly fought RSNs. For nearly three weeks, Dish Network has been in the shadow of Dish Network networks, although they returned to Cox Cable after an agreement and reached an agreement with Charter, the No. 2 cable operator in the United States. The LA Dodgers have the best track record in the Major League Baseball, but fans of their national market followers at DirecTV have not been able to watch the games broadcast by SportsNet LA for six seasons because of the fact. a car conflict.
Sinclair, meanwhile, has also taken a stake in the jewel of the former crown Fox RSN, the YES network. The company is associated with private equity investors and Amazon to obtain the rights to broadcast and stream the New York Yankees and Brooklyn Nets games under a contract of $ 3.5 billion. The sale of YES has been treated separately from other former Fox RSNs.
In the Friday announcement of the end of the deal, the parties said the deal gave the networks $ 10.6 billion worth and a total purchase price of $ 9.6 billion. The price is subject to some adjustments, the companies said.
Entertainment Studios
The RSNs were acquired through Sinclair's new indirect subsidiary, Diamond Sports Group. Allen, who bought Weather Channel and runs Entertainment Studios, becomes a capital and content partner in a newly-created indirect subsidiary of Sinclair and an indirect parent company of Diamond.
The purchase, transaction costs and an additional cash amount paid to Diamond were funded through various means, according to the announcement. Sources include $ 1.4 billion in Sinclair cash; $ 1 billion of preferred shares issued by a parent company of Diamond; a $ 3.3 billion loan from Diamond; and $ 3.1 billion of guaranteed notes and $ 1.8 billion of senior notes issued by Diamond.
"We are very pleased with the transformational aspects of RSN's Sinclair acquisition and look forward to realizing these opportunities," said Chris Ripley, Sinclair CEO. "We welcome Jeff Krolik, RSN President, and the rest of the RSN management team and staff to the Sinclair family. We have a bright future ahead of us. "
Sinclair, the number one local TV channel in the United States, is creating a new RSN with the Chicago Cubs, scheduled for launch in 2020.
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