BUYERS NOT GAME
Disney RSN sale
Disney’s auction of Fox’s chain of local sports TV networks has proven to be such a complicated process that the Mouse House has decided to offer up the networks piecemeal, The Post has learned.
Bankers for Disney had hoped to sell the 22 regional sports networks, or RSNs, to a single buyer in a deal to address antitrust concerns over Disney’s pending $71.3 billion merger with Fox, sources said.
A single deal would have made regulatory approvals simpler and quicker — a pressing concern given the RSNs must be sold within 90 days of Disney’s closing on its Fox deal.
Nevertheless, concerns about continued cord-cutting among cable-TV subscribers have forced the bankers, JPMorgan Chase and Allen & Co., to get creative as they scramble to fetch a solid overall price, insiders say.
As such, they’re now conducting management meetings with multiple suitors, including those interested in just a single RSN, sources said.
“The RSN business is not a growth business, but a declining business,” an RSN expert told The Post. “There are a lot of subscriber defections [along with the rest of cable] and the RSNs do not own the digital rights.”
Disney didn’t respond to a request for comment. Charter, Sinclair and Nexstar declined to comment.
Sinclair Broadcasting, in partnership with private equity firm CVC Capital Partners, is the only known serious party that has made an offer for all the RSNs — but sources said it was a lowball bid.
Buyout firm Apollo Global Management has bid for nearly all of the RSNs but needs a strategic partner, and so has local-TV giant Nexstar Media Group. But Nexstar is not seen as a serious suitor because it just agreed to pay more than $6 billion for its rival Tribune Media, sources said.
Charter Communications, meanwhile, has bid for Fox Sports South, the RSN for the Atlanta Braves, sources said. Minnesota Twins’ owner Jim Pohlad has expressed interest in Fox Sports North, which carries his team, the NBA’s Minnesota Timberwolves, and the NHL’s Minnesota Wild. Pohlad didn’t return calls.
Disney’s bid for Fox gave the deal a multiple of 14.8 times fiscal 2018 Ebitda — up from a 10.9 times multiple in Disney’s original offer. Still, most analysts believe the RSNs aren’t even likely to fetch 10 times Ebitda, or $20 billion.
The RSNs, which make up the biggest asset group Disney is acquiring from Fox, generate about $2 billion a year in Ebitda, or earnings before taxes, interest, depreciation and amortization.
There is a chance late suitors will emerge to bolster the auction, sources said.
Major League Baseball has expressed interest in buying some, or maybe all, of the RSNs. A simple majority of team owners would need to approve a purchase. Fox, which shares a common owner with News Corp., the publisher of The Post, could buy back its networks.
The YES Network — which carries the New York Yankees and is 20-percent owned by the Yankees and 80-percent owned by Fox — is considered a cut above the other RSNs.
The Yankees, who have the right of first refusal to reacquire Fox’s stake, are talking with Amazon and others to help fund a deal. Amazon is not interested in buying the rest of the RSNs, sources said.