Amazon Bids for Disney's Regional TV Networks

It begins…

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


“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.”


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


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.

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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.


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 …


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

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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.

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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…

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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.

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a bit more here…

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.

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.

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.

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So, what’s next? The second round of bidding is due at the end of January, and the RSNs need to be sold within 90 days of the closing of the 21st Century Fox sale to Disney, which still hasn’t happened yet. I’m sure everyone would love to have the RSN sale done and dusted by the start of the MLB season in late March, but if that’s not possible and the sale drags on into April, maybe we won’t get a full rebrand of all the networks until the All-Star Break (or even the fall prior to the start of the NBA and NHL seasons).


Thank you for posting Patrick. In the media business I would not be surprised if Fox changes their mind again.


Maybe private equity will buy and fold in the odd PAC12 investment.

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Wall Street Journal: “Now a Super Bowl mainstay, Amazon spends more than McDonald’s on televised advertising”

“Super Bowl appearance is part of a larger TV advertising blitz by Amazon… U.S. TV ad outlays of Alphabet Inc.’s Google increased almost 45% in 2018 to $522.5 million, while Facebook Inc. spent $272 million, far exceeding the $13.3 million it spent in 2017…”

Disney did attract second-round offers by Thursday’s deadline from potential buyers including Sinclair Broadcast Group Inc., Apollo Global Management and Major League Baseball, according to people familiar with the sale process. But the proposals valued the remaining networks at roughly six to eight times earnings before interest, taxes, depreciation and amortization, the people said.

That may mean the bids are closer to $10 billion — aside from the billions that the Yankees channel may bring.

How good of a prize are these RSNs anyway? Well, it looks like the winner’s going to get them at a significant discount compared to the valuation when this sale began last year. The whole package was initially valued between $20-22 billion, but YES has since been carved out of that (with the Yankees buying it back with help from Amazon, Sinclair and other partners) for around $4 billion; however, the remaining package of 21 RSNs here has only received bids of “$10 billion and up,” quite a ways below the $16-18 billion original estimate for the RSNs minus YES. And earlier this month, Discovery’s David Zaslav said his company didn’t bid because he’s bearish on the future of these RSNs.