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FOX/Disney deal

https://www.bloombergquint.com/busi...annels-could-shake-up-broadcasting#gs._U1fZls

Here is Disney in the Fox Regional Sports deal in the talks.

(Bloomberg) -- Walt Disney Co.’s Bob Iger may not have planned it, but his $71.3 billion deal for 21st Century Fox Inc.’s entertainment assets could be about to reshape sports and regional broadcasting in the U.S.

With shareholders approving the sale last month, attention has turned to 22 Fox regional sports networks that regulators are forcing Disney to sell. The networks hold television rights to 44 professional basketball, baseball and hockey teams, including the Green Bay Packers and the Atlanta Braves.

The assets are attracting preliminary interest from media and technology companies including Sinclair Broadcast Group Inc., YouTube Inc. and Amazon.com Inc., as well as buyout firms such as Blackstone Group LP, CVC Capital Partners and Apollo Global Management LLC, according to people with knowledge of the matter. Sinclair Chief Executive Officer Chris Ripley on Wednesday told analysts the networks would be a “good fit.”
High Valuation

A sale process for the networks could kick off within weeks, the people said, even though Disney has at least three months after it completes its Fox asset acquisition to offload them. An auction could value the properties at about $20 billion thanks to high profitability and strong cash generation, said the people, who asked not to be identified because the matter is private.

Representatives for Amazon.com, Blackstone, CVC, Apollo and Disney declined to comment. YouTube didn’t respond to requests for comment.

While station owners are likely to bid for the networks as a package or in pieces, private equity firms could be tempted to take it one step further. With the U.S. Federal Communications Commission preparing to loosen restrictions on how many television stations one company can own, some buyout firms are scoping out deals that could bring a station owner and the sports networks together, the people with knowledge of the matter said.
Nexstar, Tegna

If the FCC scraps the rule, which prevents any one broadcaster from owning stations that reach more than 39 percent of the nation’s households, Sinclair, Nexstar Media Group Inc. and Tegna Inc. would be better placed to compete as more of their viewers migrate to online platforms.

A private equity firm, for example, could partner with a broadcaster to acquire some of the regional sports networks, or it could buy a broadcaster and then combine it with a rival or the networks, or both, the people said. Regional sports isn’t a new area for private equity -- Providence Equity Partners, for example, used to be a stakeholder in the YES network, the home of New York Yankees.

“If you look at private equity, often times they’ll want to combine it with other operations in the TV space to be able to create a stronger position in negotiations” with cable and satellite providers, said Paul Wissmann, national sector leader for media and telecommunications for KPMG.
Channel Buybacks

Distributors including Comcast Corp. and AT&T Inc.’s DirecTV pay fees for the right to carry the regional networks’ signals. A company could argue it deserves more money from cable distributors if it’s the exclusive provider of games featuring a city’s pro sports teams, as well as one of a few sources of information for local news and weather in the same market.

Adding the sports channels could also give the stations more leverage when divvying up fees with their national networks, including NBC, CBS, Fox and ABC.

Some teams, including the Yankees, are weighing whether to buy back their own channels, people with knowledge said in June. Private equity firms could play a role in those types of transactions too, said the people.

Media mogul John Malone, who teamed up with Fox founder Rupert Murdoch in the mid-1990s in a regional sports venture in a bid to shake ESPN’s hold on sports, has also expressed an interest in getting back into regional sports networks. The package of networks Disney is selling include some that were owned by the Fox/Liberty Networks back then.

The RSNs are set to come to market amid fast-paced media consolidation.

Gray Television Inc. in June said it’s buying Raycom Media Inc. for $3.65 billion. Irving, Texas-based Nexstar Media has attracted interest from P2 Capital Partners and Apollo, while closely held Cox Communications Inc. is selling TV stations. Tribune Media Co., which terminated its $3.9 billion takeover by Sinclair, is also set to be back on the auction block and station owner Tegna is another name that could be targeted, people with knowledge said.
Comcast, Dish

But buying regional sports networks comes with risk. The networks, which had long been seen as “must-carry” channels for TV distributors, have suffered from decisions by Comcast and Dish to kick them to less-popular packages or remove them from their lineups entirely in an effort to limit the cost of service.
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Comcast already owns NBC. Could they handle a debt-heavy company like Tribune?
 
Ccook55 said:
Comcast already owns NBC. Could they handle a debt-heavy company like Tribune?
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I remember Nexstar at one point claimed they wanted the Tribune stations but that got stopped because of Nexstar just took over Media General and the Sinclair/Tribune talks was at play at that point.
 
https://money.cnn.com/2018/09/14/media/disney-comcast-sky-auction/index.html

Here is an update and Disney or Comcast might have to deal with the sky issue again in the UK.

The future of Sky has been up in the air for nearly two years. It could soon be decided in a quick-fire auction.
The European broadcaster has been the subject of an extended takeover fight between Comcast (CMCSA) and 21st Century Fox (FOX) — backed by Disney (DIS), which is in the process of acquiring most of Rupert Murdoch's entertainment assets.

The episode could soon come to a dramatic close.

If neither suitor gives up before September 22, UK regulators could take the rare step of setting up an auction that will determine which US media heavyweight ends up controlling the coveted broadcaster.

Sky and its 23 million subscribers are attractive assets to US media companies that want to expand their operations to Europe and bolster their defenses against an onslaught from Netflix (NFLX) and Amazon (AMZN).

Comcast is the current higher bidder for Sky, having offered £14.75 ($19.30) per share in July. That compares to Fox's offer of £14 ($18.30) per share for the 61% of Sky it doesn't already own.

Sky investors are expecting a higher price to materialize: Shares in Sky were trading at £15.77 ($20.62) in London on Friday, a 46% premium over the £10.75 ($14.05) per share that Fox initially offered back in December 2016.


Investors are holding out for more
By Wednesday, less than 1% of shareholders had accepted the offer from Comcast, despite it having the backing of the Sky board.

The UK Panel on Takeovers and Mergers could now intervene to settle the matter with an auction, a mechanism that has been used only a handful of times in recent decades.

In such a case, the regulator would seek agreement from the parties — Comcast, Fox and Sky — on a framework for the auction, including whether it would be private or public, the number of bidding rounds and whether the companies can offer shares in addition to cash.

The companies have already been discussing the process, Bloomberg reported this week.

If an agreement cannot be reached, the regulator would conduct a five-day auction where each potential buyer is limited to one bid per day. The offers would be made public.

At the end of the week, shareholders would have two final bids to choose between.

Comcast and 21st Century Fox declined to comment.

The auction would bring to an end a dramatic period for the media industry which saw Comcast and Disney go head to head for control of 21st Century Fox, a battle that at times appeared to be personal for Comcast CEO Brian Roberts and Disney CEO Bob Iger.
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https://deadline.com/2018/09/ben-sherwood-exit-disney-abc-fox-acquisition-1202469628/

Update Ben Sherwood to leave after the Disney FOx Deal.

We are about a week or so away from Disney unveiling the names of top 21st Century Fox executives who would be joining the company following the acquisition of key Fox assets; we hear an announcement of the company’s post-acquisition structure expected may be coming on Oct.1. With 21st Century Fox president Peter Rice’s deal said to be all but done and Fox TV Group chairman Dana Walden negotiating hers, the first major Disney-ABC departure, which had been in the works for weeks, has been confirmed.


Disney-ABC TV Group Ben Sherwood is not expected to continue in the combined company. The move had been fully expected with Rice and Walden coming on board in top TV roles — Walden has been in talks to oversee key divisions that Sherwood currently does, which would include the combined 20th Century Fox TV-ABC Studios, under Rice, who would be heading all TV content. (We hear that there are conversations about Walden possibly getting some Hulu oversight, which may have led to the delay in her deal.)

There had been discussions about keeping Sherwood, who has a good relationship with Disney CEO Bob Iger, in another role post-merger related to his extensive background in news, especially if Fox, backed by Disney, took control over Sky, including Sky News. But even before Fox lost out on Sky today, rumors were rampant that Sherwood would not be staying on after the merger. Word is that, after considering an offer to return to his old area of news and non-fiction, he has opted to depart. Sherwood, who has kept vey low profile lately, is a year into a four-year contract, which runs through mid-2021, so he would be paid the remainder of his deal.

Sherwood already has been rumored as a possible successor of embattled NBC News chairman Andy Lack though I hear there have been no conversations, and it is unclear whether that would be feasible given the standard six-month non-compete he would have after leaving Disney. And, after building ABC News, I hear it is not considered likely for Sherwood to quickly switch teams and join a rival news organization, especially as he is leaving Disney on good terms.

It is possible that Sherwood returns to writing — he is an author of several best-selling books, including The Death and Life of Charlie St. Cloud, which was made into a movie — or focuses on creative/entrepreneurial endeavors.

Also expected to be going over to Disney-Fox after the acquisition is completed are FX Networks CEO John Landgraf and Nat Geo CEO Courteney Monroe. The situation is fluid with Fox TV Group chairman Gary Newman who was most recently tipped to be staying at New Fox for the near future though there also had been rumors that he may leave or get a production deal.
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https://deadline.com/2018/09/fox-wi...sky-to-comcast-ending-murdoch-era-1202471480/

Update Fox is in talks to sell its shares in Sky Network in the UK due to the Disney/Fox Talks.

After taking a couple of days to mull its options, 21st Century Fox has decided to sell its 39% stake in Sky to Comcast, enabling the Philadelphia-based media conglomerate to take full control of the European pay-TV giant.

RelatedComcast Buys Up 30% Of Sky Shares & Hopes To Close Takeover By End Of October
The move, assented to by Disney (which will soon acquire most of Fox and would have inherited the Sky stake), ends the long quest to control Sky by Rupert Murdoch after three decades as a major investor. Comcast on Saturday won an auction with Fox, paying $40 billion for the 61% majority stake. The remainder is valued at around $15 billion, or £17.28 per Sky share.

“In light of the premium Comcast has agreed to pay for Sky, we and Disney have decided to sell 21st Century Fox’s existing 39% holding in Sky to Comcast,” Fox said in a statement. “We congratulate Comcast on their pending acquisition.”

In a separate press release, Disney chairman and CEO Bob Iger highlighted the benefits of disposing of the Sky stake as well as the regional sports networks flagged by regulators, moves that will save tens of billions in costs. “Along with the net proceeds from the divestiture of the RSNs, the sale of Fox’s Sky holdings will substantially reduce the cost of our overall acquisition and allow us to aggressively invest in building and creating high-quality content for our direct-to-consumer platforms to meet the growing demands of viewers,” Iger said.

Murdoch, 87, launched Sky in 1989, paring his stake down to 39% in 1994 through a 50-50 merger with rival BSB (which created BSkyB). Over many profitable years in the 1990s and 2000s, it became a critical asset, one that Iger referred to as the “crown jewel” of Fox as he assessed the companies’ $71 billion merger. Rupert Murdoch’s son, James, would serve as CEO of Sky, and later of 21st Century Fox. He plans to strike out on his own after the Disney deal closes, likely in early 2019.

The scandal early this decade over phone hacking by Rupert Murdoch’s News of the World tabloid ultimately undid the mogul’s years-long quest to gain full control of Sky. And yet, losing the auction to Comcast in some ways enabled him to claim yet another strategic victory. Wall Street has reacted with relief to Disney not being saddled with an expensive, traditional distribution asset, with Disney shares gaining nearly 4% since Monday. That helps Murdoch’s position as the soon-to-be-top shareholder in Disney, plus his tit-for-tat battle with Comcast since 2016 bid up the value of Sky shares, boosting the value of Fox’s stake and enriching Murdoch by billions more.
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https://www.bloomberg.com/news/arti...ing-private-equity-to-buy-fox-sports-networks

Update there are now rumors that Sinclair is trying to get the regional Fox Sports Net Channels and Fox Sports West is affected by this talk.


Christopher Ripley, Sinclair’s chief executive officer, called the regional sports channels “a very interesting fit” and listed numerous potential cost savings. But he said the Fox sports networks put up for sale by Disney “are quite large” and that his company would need a partner to afford them all.





“If you’re doing the whole thing, you’d have to take on a private equity partner,” Ripley said Tuesday at an investor conference hosted by Deutsche Bank. The ultimate buyer of the Fox sports channels will have to pay in cash, he said.

Disney, which owns ESPN, plans to divest the channels as part of its agreement to buy the entertainment assets of 21st Century Fox Inc.

The sports channels could fetch about $20 billion in an auction, Bloomberg has reported. The networks hold TV rights to 44 professional basketball, baseball and hockey teams, including the Green Bay Packers and the Atlanta Braves.

The assets have attracted preliminary interest from media and technology companies including Sinclair, Google’s YouTube and Amazon.com Inc., as well as financial firms such as Blackstone Group LP, CVC Capital Partners and Apollo Global Management LLC, people with knowledge of the matter said in August.

Other Options
Ripley added that Sinclair is also “absolutely in the market” to buy more broadcast TV stations despite its failed purchase of Tribune Media Co. in August. Sinclair’s bid to become an even larger national broadcast TV powerhouse collapsed after regulators raised questions about the $3.9 billion purchase, leading Tribune to back out.
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Bloomberg needs to their information straight as far as football rights are concerned, unless they're talking about their stake in the Stadium Networks and the college conferences they have under contract. Plus, Sinclair doesn't strike me as a company that will invest in pro and college sports rights in the same way NBC and Fox has with their RSNs.

Fox alone has hundreds of millions that they dole-out each year just on MLB regional TV contracts, plus all of the other monies spent on NBA, NHL, and collegiate deals annually. Google, on the other hand, has the cash and have been slowly but surely investing in sports rights, as they have full or partial local streaming rights deals with at least three MLS teams (Orlando City SC, Los Angeles FC, Seattle Sounders). With Google's presence on the West Coast (in the Bay Area and in Los Angeles), I could see in the not-too-distant future one of these teams from the Big Four sports leagues bucking tradition, and go all-streaming.
 
https://www.broadcastingcable.com/news/aca-says-doj-must-narrow-disneys-fox-rsn-spin-off-conditions

Here is an update on how Disney and Fox should deal with the sell off of its RSN's

The American Cable Association has a problem with how the Justice Department resolved its antitrust issues with Disney's purchase of Twenty-First Century Fox assets, including, at least temporarily, its 20 regional sports networks (RSNs), Prime Ticket and the YES network.

Justice is requiring Disney to spin off those sports assets. The only stipulation about the buyers are that they be able to compete in the business of supplying video programming with Disney and that the terms of the deal don't allow Disney to interfere with that competition. But ACA says that without some additional caveats on the buyer, the spinoffs could create a new and "equally significant" antitrust issue on two fronts.

Disney has 90 days from the close of the deal, which is expected as early as January 2019, to sell the sports assets to a buyer acceptable to Justice, though the agency can grant one or more extensions up to another 90 days in total. But Disney had to agree to try and sell them as expeditiously after the close as possible.
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But Disney has to deal with Sinclair as a Rumored bidder for some of the RSN's
 
ShawnHill1 said:
Bloomberg needs to their information straight as far as football rights are concerned, unless they're talking about their stake in the Stadium Networks and the college conferences they have under contract. Plus, Sinclair doesn't strike me as a company that will invest in pro and college sports rights in the same way NBC and Fox has with their RSNs.

Fox alone has hundreds of millions that they dole-out each year just on MLB regional TV contracts, plus all of the other monies spent on NBA, NHL, and collegiate deals annually. Google, on the other hand, has the cash and have been slowly but surely investing in sports rights, as they have full or partial local streaming rights deals with at least three MLS teams (Orlando City SC, Los Angeles FC, Seattle Sounders). With Google's presence on the West Coast (in the Bay Area and in Los Angeles), I could see in the not-too-distant future one of these teams from the Big Four sports leagues bucking tradition, and go all-streaming.
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You left out the $1 Billion that Fox plans to pay the WWE starting in 2019 for SmackDown.
 
https://www.sportsbusinessdaily.com/Daily/Issues/2018/10/17/Media/Disney-Fox-RSNs.aspx

Update on the Disney's RSN talks.

Disney’s sales process for Fox’ 22 RSNs took a big step forward last week when the company sent the official bid book to prospective bidders, according to several sources. Said to be more than 150 pages, the book was sent to networks, digital companies, distributors and investment banks who agreed to sign a non-disclosure agreement. Allen & Co. and JP Morgan Chase are handling the sale for Disney, sources said. It is not known exactly which companies received the book, but one surprise is that Comcast did not, as sources say that it found the some of the NDA’s conditions to be too onerous. It has been long assumed that Comcast was interested in buying the Fox RSNs in markets where it operates a dominant cable system: Atlanta, Detroit, Miami and Tampa. Comcast could change course and sign the NDA later in the sale process, sources say. Charter also has played down speculation that it is interested in buying the RSNs. Fox, which has run the 22 RSNs and obviously helped prepare the book, is believed to be interested in buying the RSNs back.
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https://deadline.com/2018/10/new-fox-charlie-collier-gary-newman-exit-1202474293/

Charlie Collier To Lead Fox Broadcasting Network

Note these are plans Fox has after the selling of 20th Century Fox to Disney is finalized.

New Fox chairman and CEO Lachlan Murdoch looked outside for a leader of the soon-to-be independent Fox broadcasting network that will emerge after Disney’s acquisition of key Fox assets. AMC President and General Manager Charlie Collier has been named CEO of Entertainment. He will start Nov. 1, reporting to Murdoch who just made the announcement in an internal memo, obtained by Deadline. You can read it under the story.

Fox TV Group chairman and CEO Gary Newman, who had been in negotiations to stay on and oversee the broadcast network as it ushers in a new era, will be leaving after helping with the transition. Fellow Fox TV Group chairman and CEO Dana Walden also will be departing for a high-level job at the combined Disney-Fox TV operation.
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The Yankees might be buying back the other 80% of YES.
The New York Yankees are planning to buy back the controlling interest in the YES Network that the Major League Baseball club sold to 21st Century Fox four years ago, an industry source with knowledge of the deal told Boomskie on Baseball.

The re-acquisition is slated to occur prior to the closing of the sale of Fox properties to Disney early next year for $71.3 billion.

Bloomberg reported in June that the Yankees were considering the proposition. Fox purchased 80% of the network in separate transactions in 2012 and ’14, with the earlier deal valuing the network at about $3.8 billion, according to Bloomberg.

The Yanks, who own the remaining 20%, would have to pay fair market value to buy back the rest of the network.

The decision comes after the U.S. Justice Department approved the deal between Fox and Disney last month with the proviso that Disney divest itself of the 22 regional sports networks that would come with the transaction, including YES.
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https://www.forbes.com/sites/barrym...uy-back-yes-network-after-fox-sale-to-disney/
 
https://www.cnbc.com/2018/10/26/rupert-murdoch-may-buy-back-fox-sports-networks-from-disney.html


Update On the Fox/Disney Talks

The front-runner to buy 22 regional sports TV networks from Disney is the same company that sold them in the first place.

"New Fox," the company that will remain after Rupert Murdoch sells $71.3 billion worth of 21st Century Fox assets to Disney, is the leading contender to buy back the RSNs it "sold" to Disney as part of the larger transaction, according to people familiar with the matter. Those networks broadcast the games of 44 professional teams from Major League Baseball, the National Basketball Association and the National Hockey League

Formal offers haven't come in yet. As Sports Business Daily reported, Disney only recently sent out its bid book to prospective buyers. News that Fox was considering buying back the channels was previously reported by The Information.

But people familiar with the process, who asked not to be named because the negotiations are private, say New Fox is the most serious buyer for all the networks. That's a cleaner outcome for Disney than selling the networks piecemeal, which would bring in smaller buyers and private equity firms.
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Yes New Fox is mentioned to be a bidder.
 
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