Fox Corp. will not bid on 22 regional sports networks that Disney is set to auction off. Walt Disney Co. must divest the networks as part of its deal to buy the entertainment assets of 21st Century Fox.
Fox Corp. - also known as "New Fox" - is the Murdoch-family-controlled company that will operate the 21st Century Fox operations that will not be purchased by Disney: Fox News Channel, the Fox broadcast network and its TV station group. Analysts believed that the regional sports networks would have been a fit with New Fox, which will have a focus on live programming.
"In connection with these preliminary discussions, Fox confirms that it does not intend to bid for any of the Fox regional sports networks that Disney (or any entity operating on its behalf) may sell as required by the consent decree with the U.S. Department of Justice," Fox said Friday in a filing with the Securities and Exchange Commission.
The company's decision not to make a bid could raise questions about the channels' long-term viability as a growing number of people "cut the cord," turning away from traditional pay TV.
Sports channels typically command the highest carriage fees from satellite and cable companies. Leagues and teams are also looking closely at making their games available on over-the-top streaming services, where viewers can watch programming with out a pay-TV subscription.
Still, a number of media companies and private equity groups reportedly are kicking the tires on the channels. Disney, which already owns sports juggernaut ESPN, cannot keep Fox's regional sports channels due to the U.S. Department of Justice's antitrust concerns. So the Burbank giant has agreed to unload those channels when it completes its $71.3-billion acquisition of much of 21st Century Fox.
Tech giant Amazon, media firm Discovery, and TV station owners Sinclair Broadcast Group and Tegna have all been mentioned as possible suitors. Investment firm Silver Lake Partners is teaming up with Endeavor on a bid for the channels, and Apollo Capital Management has discussed teaming with LeBron James' media company, Uninterrupted.
On Thursday, hip-hop artist and actor Ice Cube and his business partner Jeff Kwatinetz indicated they were also interested in pursuing the channels.
Cube and Kwatinetz are partners in the Big3 professional basketball league, which ran on Fox Sports for its first two seasons. The league is currently seeking a new TV partner.
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