The Justice Department approved the deal for Disney to acquire 21st Century Fox with one significant condition.
According to an UPROXX report, the DOJ approved the deal between Disney and Fox that’s gone through several revisions since it first made news headlines in December 2017. However, as part of the government’s agreement to the deal, Disney has to sell the regional sports networks from Fox because those, combined with ESPN’s various networks, could end up resulting in an unfair sports broadcasting monopoly.
Assistant Attorney General Makan Delrahim said, “Today’s settlement will ensure that sports programming competition is preserved in the local markets where Disney and Fox compete for cable and satellite distribution.”
In all, FS1, FS2, all of the regional sports channels, along Fox News Channel, Fox Business Network, and the Fox broadcast network are not involved in the deal, and they’re being referred to as New Fox. So far, Comcast has not been able to outbid Disney for the Fox Networks. The portion of Fox that holds interest includes the TV and movie studio, Star India, FX, Nat Geo, Fox’s 30 percent in Hulu, as well as Fox’s 39 percent stake in Sky, which is a European satellite TV company.
According to the Hollywood Reporter, Disney agreed to the DOJ’s proposal and plans to pay a total of about $71.3 billion at $38 per share in cash and stocks. Comcast could still manage to outdo Disney’s offer, though. Disney’s original proposal for Fox was $52.4 billion in stock, and then Comcast beat it with $65 billion in cash before Disney turned around and outbid them.
Wall Street currently values the portion of Fox that Disney isn’t purchasing at $18.3 billion.
Fox CEO James Murdoch and co-executive chairman Lachlan Murdoch sent a memo to Fox employees after the DOJ approval today. In the memo, they said, “The Department of Justice announced today that it has entered into a consent decree with Disney and 21st Century Fox that allows the acquisition to proceed, while requiring the sale of the Fox Regional Sports Networks within 90 days following the close of the Disney transaction. However, there are still other conditions to closing, including stockholder approval and additional regulatory approvals outside the U.S. At this point we anticipate that the Disney transaction and the creation of new “Fox” will be completed within 6-12 months.”
They continued the memo by discussing how valuable the sports division is, and then they thanked everybody for their patience and understanding moving forward. They promised their employees they’d continue to communicate critical details about the situation as it unfolds.
The deal isn’t done, and it faces further regulation issues in the United States as well as those from other countries.