Fox Sports Channels Sell-Off Could Shake Up Broadcasting

Walt Disney Co.’s Bob Iger may not have planned it, but his $71.3 billion deal for 21st Century Fox Inc.’s entertainment assets could be about to reshape sports and regional broadcasting in the U.S.

With shareholders approving the sale last month, attention has turned to 22 Fox regional sports networks that regulators are forcing Disney to sell. The networks hold television rights to 44 professional basketball, baseball and hockey teams, including the Green Bay Packers and the Atlanta Braves.

Bloomberg reports the assets are attracting preliminary interest from media and technology companies including Sinclair Broadcast Group Inc., YouTube Inc. and Amazon.com Inc., as well as buyout firms such as Blackstone Group LP, CVC Capital Partners and Apollo Global Management LLC, according to people with knowledge of the matter. Sinclair Chief Executive Officer Chris Ripley on Wednesday told analysts the networks would be a “good fit.”

A sale process for the networks could kick off within weeks.

While station owners are likely to bid for the networks as a package or in pieces, private equity firms could be tempted to take it one step further. With the FCC preparing to loosen restrictions on how many television stations one company can own, some buyout firms are scoping out deals that could bring a station owner and the sports networks together, the people with knowledge of the matter said.

If the FCC scraps the rule, which prevents any one broadcaster from owning stations that reach more than 39 percent of the nation’s households, Sinclair, Nexstar Media Group Inc. and Tegna Inc. would be better placed to compete as more of their viewers migrate to online platforms.

Adding the sports channels could also give the stations more leverage when divvying up fees with their national networks, including NBC, CBS, Fox and ABC.

Some teams, including the Yankees, are weighing whether to buy back their own channels, people with knowledge said in June. Private equity firms could play a role in those types of transactions too, said the people.

Media mogul John Malone, who teamed up with Fox founder Rupert Murdoch in the mid-1990s in a regional sports venture in a bid to shake ESPN’s hold on sports, has also expressed an interest in getting back into regional sports networks. The package of networks Disney is selling include some that were owned by the Fox/Liberty Networks back then.

The RSNs are set to come to market amid fast-paced media consolidation.