New Fox is reported to be in race to buy back the 22 regional sports networks, which Ruport Murdoch’s 21st Century Fox is selling to Walt Disney as part of the $71.3 billion deal agreed in June this year.
New Fox, the owner company for the assets that will not be transferred to Walt Disney, will be focusing on sports and news business. In such a scenario, the buyback deal will help expedite company’s business expansion.
The 21st Century Fox-Walt Disney deal includes film and TV studio, additional stake in Hulu, a stake in Sky, Star India and some cable channels, including the 22 regional sports networks. Reports suggest that the regulators are making it mandatory for Walt Disney to disown the regional sports networks because of the company’s ESPN Sports business. The Department of Justice has declined Disney to retain the RSNs as the assets coupled with the ESPN ownership will put the company in a position of monopoly in sports programming.
The Fox News and Fox Business excluded from the Walt Disney deal will be run by the new Fox, which will also run the sports business. CNBC has reported last week that the Ruport Murdoch-owned company is determined to outbid the others to get the 22 RSNs back. If all goes well, the deal might well be closed in time to ensure that the 21st Century Fox does not have to transfer the RSNs to Walt Disney.
New Fox is expected to make a bid for up to $20 billion to get the RSNs back as Walt Disney will be keen to dispose them off as a bouquet to complete the sales process fast for regulatory approvals for the bigger deal.
The revised deal by Walt Disney to acquire the Fox assets has fetched the Murdoch Group media house around $19 billion more over the earlier negotiated deal between the two companies. In such a scenario, the Fox will be well-funded to get the RSNs back in a transaction that may go up to $20 billion.
According to a Sportsbusiness Daily report, Disney has floated the bid book to potential buyers. Though there have been no formal offers as of now.
Since the RSNs are mostly tied through the cable networks, new players like google, amazon and facebook might not find much business sense in acquiring them.