The new-model Fox Corp. will not be a bidder in the auction of the 22 regional sports networks that Disney is set to buy from 21st Century Fox.
Fox confirmed in a Securities and Exchange Commission filing Friday that it “does not intend” to make a run at any of the RSNs about to change hands. The Disney-21st Century Fox transaction is expected to close by early March, if not early February. Disney has to sell the local cablers to comply with the terms of the agreement it reached last year with the Justice Department clearing the way for the $71.3 billion transaction.
There’d been speculation that the new Fox set to emerge after the Disney deal is done would try to buy back those 22 outlets. The RSNs were valued at about $20 billion in the terms of the Disney-21st Century Fox transaction. It’s still unclear how robust the market is for Disney’s mandated sale process.
RSNs have become a lightning rod in the pay-TV arena because they command high per subscriber fees, driving up MVPD bills. But long-term there’s also concern about whether RSNs will be able to hang on to local sports rights as deep-pocketed digital giants barrel into the premium video business.
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“Fox confirms that it does not intend to bid for any of the Fox regional sports networks that Disney (or any entity operating on its behalf) may sell as required by the consent decree with the U.S. Department of Justice,” 21st Century Fox said in the filing.
The filing also reported that 21st Century Fox “intends to commence preliminary discussions with investors in connection with a potential financing” of the $8.5 billion special dividend that new Fox will pay to 21st Century Fox to cover help cover the tax liability incurred as part of the spinoff of the new Fox Corp. entity from 21st Century Fox. Fox addressed its lack of intent regarding the RSNs in an effort to assure potential lenders that it does not plan to add a big chunk of debt for the RSNs any time soon.
Fox’s declaration comes as bidding for the RSNs is heating up. On Thursday, Ice Cube said he was trying to assemble a bid for the group as part of the expansion of the Big3 basketball league he helped launch in 2017. Amazon, Tegna and Sinclair Broadcast Group are among the companies known to have expressed interest in buying some or all of the channels.
CNBC reported Friday that the second round of bids are due at the end of this month.
