This would be huge - Fox would sell everything except Fox, Fox News, and the Fox Sports properties. Movie Studio, Fox owned channels (National Geographic, FX1, FX2) and overseas networks would go to Disney.
If a deal like this did happen and did receive regulatory approval, it could have some significant effects on sports. For one thing, Sky would be reportedly included in the sale, which would dramatically expand Disney’s overseas sports presence. Beyond that, acquiring Fox’s movie studio, FX, and National Geographic would give Disney a whole new lineup of TV and movie rights, and that could potentially be rolled into their planned non-sports streaming service (currently planned for a 2019 launch, a year after the ESPN streaming service rolls out, and expected to feature Marvel and Star Wars properties as well as other Disney content).
Looks like talks have started up again. This would be very interesting if ESPN got the regional Fox networks and kept them running…especially if they tied it into their streaming platform.
There was a point where ESPN was hoping to get into the RSN game. Back in 1997, ESPN had plans to launch ESPN West with the then-Anaheim Angels and Anaheim Mighty Ducks as the anchors. Fox sued to stop that and won in court, so the ESPN RSN never got off the ground.
How much would assembling a regional sports empire and adding it to ESPN’s existing properties be worth to the network? According to the Los Angeles Times‘ Meg James, Fox’s RSNs have been valued at $22.5 billion. Additionally, Fox’s 39 percent stake in Europe’s Sky Sports group of channels is worth $8.8 billion, while a 30 percent stake in Hulu adds another $1.75 billion in value.
espn was against us joining the small12. espn with the cartel and the cfp has created a “franchise” type league. I want to be optimistic but I can’t see how this will help us.
This could have ramifications in Houston if Fox Sports Southwest is turned over to AT&T. My guess is that FSSW might be dropped from cable packages in Houston since AT&T already owns a channel in the area.
Distributors hate the idea of Disney owning ESPN plus 22 RSNs — the most expensive channels by far. Look for Disney to placate some of that opposition by selling RSNs to Comcast and AT&T in the markets where they own cable systems. That means Fox’s RSNs in Detroit, Minneapolis and Miami will move to Comcast, and its RSN in Dallas will go to AT&T.
So, just what’s in that offer? Well, Comcast is offering $65 billion in an all-cash bid, a 19 percent premium over Disney’s all-stock offer that’s estimated at around $52.4 billion. They’re also offering to pay Fox’s $1.525 billion breakup fee to Disney and another $2.5 billion in a reverse termination fee if this doesn’t go through.
From a sports perspective, the big impact of this deal remains Disney’s acquisition of Fox’s regional sports network empire, which includes 20 channels across the country and airs games for dozens of MLB, NBA and NHL teams. If Disney holds onto those networks, it will have to option to give them ESPN branding and integrate them with the rest of the ESPN universe — or keep them separate from the operation in Bristol and simply reap the profits they provide. And if Disney chooses to sell the networks, perhaps due to federal scrutiny of its deal with Fox, it could have several sensible suitors. Regardless, Wednesday’s news should create significant ripples through sports media.
This does seem like a blow for Disney and ESPN. The RSNs were far from the only thing here, and far from the most important thing here (as Disney’s willingness to agree to these terms rather than fight them indicates), but they had a whole lot of possible useful synergies with ESPN, from reporter/host crossover to a place to air/rerun ESPN programming to further potential ESPN+ offerings. And they also represent a useful and profitable business in their own right; RSNs still draw high per-subscriber fees, and they’ve remained in pretty strong demand even with cord-cutting expanding.
Disney also would have had an even larger share of the U.S. sports landscape if this deal had gone through, and they would have had even more leverage in carriage negotiations. Of course, the Fox deal is still going to be tremendously important for the company as a whole, and they’re still picking up a ton of valuable assets there. But the requirement to divest from the RSNs means they won’t get as much as they’d hoped for on the sports side.
This opens the door for an Amazon or other digital platform to also have a cable connection. Best of both world some say? Let’s get ready for the Amazon Sports Network.
At the same time Raycom…Back to the future…
Fox had a Houston channel that was a branch off of Fox Southwest. When the Rockets and Astros decided to make their own channel with Comcast, FOX absorbed the Houston channel into Fox Southwest. FOX decided they didn’t need a specific Houston channel anymore.
Reuters is reporting that Comcast is doing it now so that Fox shareholders won’t have antitrust concerns, plus increase their chances for uprooting Disney’s bid. Disney has a $71 billion cash-and-stock offer to take over 21st Century Fox’s entertainment assets. Comcast offered $65 billion and is getting ready for yet another bid for Fox.
Disney is reportedly thinking of selling off Fox’s RSN’s to various companies like AT&T, Charter and other companies. And should Comcast be successful in its bid to overtake Disney and buy Fox, Disney could in turn buy those RSN’s and fold them into the ESPN brand.
The portion of Fox that Disney proposed to purchase includes the TV and movie studio, Star India, FX, Nat Geo, Fox’s 30 percent stake in Hulu and Fox’s 39 percent stake in Sky, the European pay TV company that Comcast is looking to acquire.