Disney may still proceed with RSN bids despite Big3 drama
By: Josh Kosman
Disney is still considering spinning out its RSNs to shareholders as it prepares to move forward and take final bids for the 21 sports networks on Monday, The Post has learned.
“There is a [deal value] threshold,” a source said, and if suitors do not hit that mark, Disney is planning to spin out the Fox regional sports networks and give up operating control.
While the threshold value is unclear, any sale of less than $10 billion for the 21 networks would be seen as disappointing, sources said.
The US Department of Justice has signaled that Disney can do the spin-out to complete the conditions of its $71.3 billion purchase of Fox, with the divestiture completed by mid-June.
Disney pooh-poohed an earlier Post report that said it was considering a spin-out.
The Mouse House would prefer a sale but is not set on selling the regional sports networks that include Fox Arizona, Fox Detroit and Fox Kansas City, a source close to the situation said.
Disney cannot maintain ownership of Fox’s RSNs since it already owns ESPN. Controlling both would give Disney too much sports programming power when negotiating with cable companies and price control over consumers.
The auction took some unusual turns last week when Ice Cube’s Big3 Basketball accused Charter Communications of threatening not to carry the RSNs on its cable networks were Big3 to win the auction.
John Malone’s Liberty Media, which owns 25 percent of Charter, is another suitor for the RSNs.
Big3 has written to federal regulators, maintaining the cable company had “disseminated its threat to drop the RSNs to other members of the industry, thereby suppressing auction prices, chilling bidding and ultimately hurting Disney’s ability to secure the best price for the RSNs.”
Big3’s allegations have not stopped Disney from moving forward with the auction, which has a Monday deadline for binding bids, two sources with direct knowledge of the situation said.
At this point, Disney is not taking Big3’s allegations seriously, two sources said.
Major League Baseball, one of the last remaining suitors, is also planning to move forward with an offer Monday — despite last week’s potentially disruptive news, the sources said.
Rep. Elijah Cummings (D-Md.), chairman of the House Oversight and Reform Committee, and Rep. Raja Krishnamoorthi (D-Ill.), made a request to MLB Commissioner Rob Manfred for documents relating to the potential offer, feeling the acquisition could represent “anticompetitive conduct.”
Manfred believes individual team owners would approve an RSN purchase, an owner requesting anonymity said.
Sinclair Broadcast Group, which is teamed with Apollo Global Management, is the only other known suitor.
Last month the Yankees teamed up with Amazon and Sinclair to buy the YES Network for $3.5 billion from Disney.
Disney, Liberty Media and Sinclair Broadcast Group did not return calls and e-mails.
Big3 Basketball could not be reached for comment.
