Amazon Bids for Disney's Regional TV Networks


(Steve O'Keefe) #1

It begins…

"Amazon bids for Disney’s 22 regional sports networks, including YES Network, sources say
David Faber | @DavidFaber"

https://www.cnbc.com/2018/11/20/amazon-bids-for-disneys-22-regional-sports-networks-including-yes-network-sources-say.html?__source=newsletter|breakingnews


(Steve O'Keefe) #2

"Disney, which is buying Twenty-First Century Fox’s film and television assets, had said it would divest 22 of Fox’s regional sports networks as part of its agreement with the Department of Justice."


(Patrick) #3

Good…means Amazon is finally starting to try to get a stake in something along these lines. They’ll need content.


(Patrick) #4

All equity firms aren’t equal, of course, and it’s quite possible that an equity firm that comes out on top here takes a different approach to maximizing value. Maybe they invest heavily in RSN content and try to make money by providing a more local version of an all-hours sports network that more people watch outside of games, or maybe they maximize carriage instead of per-subscriber fees and we don’t see nasty carriage fights. But whichever approach is eventually taken, it seems likely that a private equity owner will operate RSNs in a very different way than what we’ve seen to this point. And with two-thirds of the confirmed bidders so far falling into that private equity camp, it’s worth pondering what that could look like.


(Chris) #5

Some of the same morgan stanley heads that were responsible for the 2007 crash are at apollo now. None of these guys went to jail instead they keep cashing in. Karma will catch up to them.

Amazon bidding makes perfect sense. Amazon Prime was the beta test. I sure hope we have an open door with Amazon. They might be the prime (pun intended) key to our P5 invite. Houston by its demographics is a huge treasure chest for them. Marketing wise this is a marriage made in heaven…and so is the PAC12 with Amazon.


(Dave) #6

One of the articles stated Amazon and their partner the Yankees are only interested in the YES network …

Some of the other privates want to split up the remaining 21 RSNs into their local area … I just don’t see that happening … because schools like OU will have to probably renegotiate their contracts …

BTW when I was between cables recently my only source to football games was accessing American football games through foreign channels in GB Finland Ireland and Russia … I did pick up the OU Fox football network from a Russian TV channel in Siberia … the russians broadcasters were ah hoot to listen to and so was watching Irish commercials … meanwhile …

MY GUESS …

Fox will get them back and incorporate them into their existing sports entity …


(Steve O'Keefe) #7

Private Equity firms (PE) are like house flippers. They buy companies, clean 'em up financially, and flip 'em.

A typical project:

(1) keep & develop operations that fit into a cohesive, viable whole.
(2) sell to someone else the parts that are viable but don’t fit in.
(3) shut down operations with poor prospects.
(4) flip it in 2-5 years.


(Kendall Barrett) #8

Wow…I can’t believe that folks aren’t lining up to buy The Longhorn Network…what a pig in a poke…unless you dig volleyball 24/7…


#9

That’s the problem with LHN. No one is watching it so ESPN is losing money on that deal.

The creation of LHN derailed a conference, acted as another drag on a cable network, gave UT even more money than it already had and, in the end, failed to create the imbalance as feared. Likely because no one is watching it.


(Steve O'Keefe) #10

a bit more here…

https://seekingalpha.com/article/4226217-will-faangs-finally-kill-television


#11

Amazon has a boatload of money but with the NFL they are piggybacking on Fox’s production. With the Fox networks Amazon will have to assume the production costs. I’m curious if they’ll offer the Nets at the prime rate or if they’ll want to charge more.

People that want to watch the NBA/NHL on the Nets could really struggle to find it if they do streaming only. My guess is they’ll have to work out some deal with cable companies to carry Amazon Sports or whatever they’ll call it. Exclusive streaming of live sports would really be problematic.


(Patrick) #12

Disney was hoping to rope in over $20 billion from the Fox Sports Networks, but with heavy hitters like Comcast and Fox itself sitting out the first round of the bidding, there’s no doubt that the Mouse is now scrambling looking for creative ways to sell the networks.

There is still a chance that Comcast or Fox will get into the bidding for the second round, but for now, Disney is facing a federal deadline to sell the RSNs as its deal to buy Fox’s entertainment assets is closing soon. It has to sell the Fox Sports Nets within 90 days of its Fox purchase.


(Mike Higdon) #13

It has to sell the Fox Sports Nets within 90 days of its Fox purchase.

To me, that says it’s definitely a buyers market and potential buyers could wait until the last minute and get the price way down. “Must sell – make offer” is a buyer’s dream.