Sinclair to Acquire Sports Networks From Disney
May 02 2019 - 7:18PM
Dow Jones News
By Joe Flint
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, already the nation's biggest owner of local
television stations, the deal 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 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 was thwarted by the Federal
Communications Commission.
Fox Business reported last month that Sinclair and Disney had a
"handshake agreement" for the 21 networks that had yet to be
finalized.
Other suitors for the channels included Liberty Media Corp. and
Big 3 Basketball LLC, whose management includes Jeff Kwatinetz and
rapper and actor Ice Cube.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
May 02, 2019 19:03 ET (23:03 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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