As Disney’s purchase of numerous 21st Century Fox assets looks to close, the Department of Justice is reportedly considering a revision to their conditional approval of the deal to allow Disney to spin-off its regional sports networks.

What’s happening

  • According to a report in the New York Post that cites sources familiar with the situation, the U.S. Justice Department is considering allowing The Walt Disney Company to spin-off the 22 regional sports networks it is purchasing the Fox deal instead of having to sell them.
  • However, Disney would still need to relinquish control of whatever new entity it creates for the networks.
  • As an unnamed source told the Post, “They can certainly spin out just control, or spin it out to a separate board with a partial public company.”
  • This news comes as Disney is reportedly having a hard time finding a buyer for the networks.
  • One problem is that, without the backing of a Fox or Disney behind them, it may prove difficult for the RSN owners to get cable companies to carry the networks.
  • Neither Disney nor the DoJ responded to the Post’s request for comment.
  • For what it’s worth, the New York Post and 21st Century Fox share common ownership: Rupert Murdoch.

Catch-up quick — Disney and the DoJ

  • When the Justice Department announced conditional approval for Disney’s acquisition of 21st Century Fox assets, the one aforementioned condition was that Disney needed to sell off the 22 regional sports networks it was purchasing from Fox.
  • This condition would need to be met within 90 days of the deal closing.
  • With Disney’s ESPN already being such a prominent sports network, the fear was that the company controlling these additional networks would give them too much control over the landscape.
  • For a time, there were reportedly multiple potential buyers for the RSNs — including New Fox, which will retain such brands as Fox News, the Fox Broadcast Company, and Fox Sports after the transaction with Disney.
  • Unfortunately, New Fox announced they would not be rebuying the networks, severely dropping the value of RSNs that Disney was hoping would fetch as much as $20 billion.