Sinclair Broadcast Group, the biggest owner of local television stations in the United States, has landed the 21 regional sports networks owned by Disney as part of the acquisition of 21st Century Fox entertainment assets.
The end price, according to a Wall Street Journal report, is expected to be a little more than $10 billion. It does not include the purchase of the YES Network, where Sinclair is teaming up with Amazon and the New York Yankees (which had the first right of refusal on any sale) on a $3.45 billion buy. The total expected proceed of the total sales should be close to $14 billion–short of the $16-$20-billion originally estimated.
One reason why: a bidding war for the networks never really materialized. While there were plenty of potential suitors when the sale was first announced as a condition of Disney’s purchase of the Fox assets, they gradually fell to the wayside. MLB was originally involved in the bidding, but dropped out along with Apollo Global Management in an extremely fluid situation that saw Sinclair enter and leave the bidding. In the end, the final potential suitors were Sinclair, Liberty Media Corp. (owner of the Atlanta Braves and a major media player; Twins owner Jim Pohlad was once said to be part of a Liberty bid) and Big 3 Basketball LLC.
That Sinclair landed the networks is not a surprise. The media giant is already partnering with the Chicago Cubs on the Marquee Sports Network, set to launch in 2020, as well as the Yankees and Amazon on the aforementioned YES Network buy.
Buying the RSNs would have been a challenging load for MLB. The big issue that is certainly driving down the value of the RSNs: the uncertain future of cable networks at a time when streaming technology and cord cutters are changing the economic landscape. MLB is positioned to capitalize on direct-to-consumer streaming, and adding the RSNs could have allowed teams to offer a unique mix of access that could also include season tickets and more. But there’s no guarantee that as cable giants shrink, RSNs could lose a preferred place on basic cable and be relegated to a plus-fee sports tier, and in the end the teams could reclaim their rights and launch their own broadcast endeavors.
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