Sinclair Gets Disney Regional Sports Units -- WSJ
May 03 2019 - 2:02AM
Dow Jones News
Acquisition of 21 networks for more than $10 billion is part of
deal with Fox
By Joe Flint
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 3, 2019).
TV-station giant Sinclair Broadcast Group Inc. has struck a deal
valued at more than $10 billion to acquire 21 regional sports
networks from Walt Disney Co., according to people familiar with
the matter.
The agreement is expected to be announced as early as Friday,
the people said.
For Sinclair, which already is the nation's biggest owner of
local television stations, the acquisition would instantly make it
a force in cable programming. Among the properties it is acquiring
are sports channels in Los Angeles and Detroit.
Disney acquired the sports networks as part of its purchase of
entertainment assets of 21st Century Fox and agreed to sell them to
pave the way for government approval of the deal.
"Sinclair got a great deal and should be able to cut costs and
leverage the RSN's and their stations together effectively" with
distributors and advertisers, said Patrick Crakes, a sports media
consultant.
Sinclair Broadcast has separately partnered with the New York
Yankees to acquire the YES Network, another of the networks once
controlled by Fox, in a deal valued at $3.45 billion, people close
to that deal said. That sale, which hasn't been finalized, also
includes Amazon.com Inc. as a partner.
The price tag for the regional sports networks is less than some
industry observers initially anticipated.
When Disney began preparing to sell the networks, the price tag
likely bidders and industry analysts forecast was between $16
billion and $20 billion.
Regional sports networks carry popular local sports, primarily
basketball and baseball. They typically are among the most
expensive channels for distributors and customers. As more pay-TV
customers have cut the cord, regional sports networks have suffered
the same audience erosion as the rest of the television business.
Younger viewers, in particular, now seek out sports content online,
where highlights are ubiquitous.
Pay-TV distributors also have become more willing to drop
regional sports networks rather than pay high prices to carry
them.
In Los Angeles, AT&T Inc. has never carried the Los Angeles
Dodgers baseball network that was launched several years ago.
Comcast Corp. didn't carry the YES Network for all of the 2016
season because of a fight over rates.
Still, Sinclair sees value in local sports programming as it
seeks to increase its content holdings.
The company already owns the Tennis Channel and is launching its
own regional sports channel in Chicago in partnership with the
Chicago Cubs.
For Sinclair, the deal represents a big win after its efforts to
buy Tribune Media Co. last year were thwarted by the Federal
Communications Commission.
Fox Business reported last month that Sinclair and Disney had a
"handshake agreement" for the networks that had yet to be
finalized.
Other suitors for the regional sports networks included Liberty
Media Corp. and Big 3 Basketball LLC, whose management includes
entertainment executive Jeff Kwatinetz and rapper and actor Ice
Cube.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
May 03, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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