Bidders for 22 Fox regional sports networks remain a mystery
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Michelle Clancy
| 17 November 2018

The bidders for 22 regional sports networks (RSNs) in the US that are being divested as part of Disney’s deal to buy 21st Century Fox’ media assets remain unknown going into the weekend.

Disney must spin off the networks to complete the $71B media-asset buy. The crown jewel is the YES Network, home of the New York Yankees, which is considered to be worth more than $4bn. The other RSNs are valued by Guggenheim at an average of $860m each.

With everyone from Sinclair Networks to rapper Ice Cube exhibiting interest in one or more of the nets in recent weeks, speculation has been high when it comes to who would submit winning bids. However, the only known outcome of that bidding process, which closed at the end of last week, is that Comcast decided not to participate.

Sports Business Journal noted that Comcast didn't submit offers to Allen & Co, who's handling the sale along with JPMorgan Chase. In fact, it didn’t sign a non-disclosure agreement last month that would have given it access to the bidding process for the RSNs. That’s a surprise, given that Comcast has extensive operations in sports-heavy places covered by the RSNs, like Atlanta, Detroit and Miami.

However, Mark Lazarus, NBC Broadcasting and Sports chairman, said that he anticipated anti-trust scrutiny if the cable giant tried to buy any RSNs, given the depth of sports nets that it already has as part of the NBCUniversal portfolio.

“The government’s not going to let us buy any more where we are heavy in cable — we’ve already been informed of that,” Lazarus said during a recent Fairfield County Sports Commission event in Stamford, Conn. “We can’t buy any of those assets that Disney is going to try to dispose of.”

The new Fox also reportedly did not bid, even though market watchers has expected it to try to recapture the nets at a discount. The RSNs have always been profitable for the company, and it remains to be seen if they did indeed stay on the bench this time.

It could be that the RSNs simply don’t fit with the company’s new, slimmed down, national outlook. “We really ran the regional business and the national business pretty separately,” Eric Shanks, Fox Sports president, COO and executive producer, said at a recent Bank of America conference. “On the buy side, we didn’t buy rights together.”

Meanwhile, Liberty Media, which owns baseball's Atlanta Braves, is rumoured to be a player for Fox Sports South, which broadcasts Braves games along with the Atlanta Falcons, Hawks, Dream and soccer team Atlanta United.

Liberty Media controls US cableco Charter Communications through its Liberty Broadband unit, which makes a purchase make sense, according to company management.

“It’s a business which is arguably challenged over time as the [cable] bundle breaks or loosens, but it’s also one where through Charter, logically distributors should have a role potentially, or, through the Braves as a content owner we might have a role in some of them,” said Liberty CEO Greg Maffei. “So we’ll look at it."

The divestiture has also triggered a clause regarding the YES Network – the New York Yankees now have the option to buy the network back. Under the acquisition agreement forged when Fox took a majority position in YES in 2014, the iconic ball club has the right of first refusal on acquiring the 80% of YES it doesn't own.

Talks are indeed underway, according to reports, with the Yankees lining up financing partners.

A deal could close as early as the first quarter of next year.