Disney is now one step closer to a merger with the 21st Century Fox company. The Department of Justice has approved the deal. The only stipulation put into place was that Disney would have to sell Fox’s 22 regional sports networks. This would prevent Disney, who already owns ESPN from creating a monopoly in the sports broadcasting business.
Assistant Attorney General Makan Delrahim said “American consumers have benefitted from head-to-head competition between Disney and Fox’s cable sports programming that ultimately has prevented cable television subscription prices from rising even higher. 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.”
Disney will pay $71.3 billion to acquire most of Fox’s assets including FX, National Geographic, Fox’s current 30 percent share of Hulu, as well as film franchises such as Avatar and X-Men. The Fox News Channel and Fox broadcasting stations are not part of the merger deal.
Comcast, Disney’s rival in the merger deal, is not out of it yet. They still have time to top Disney’s current offer.
Shortly after the Department of Justice’s decision regarding the Disney/Fox merger, a memo was sent out by Fox CEO James Murdoch and co-executive chairman Lachlan Murdoch.
DEAR COLLEAGUES,
Today the Antitrust Division of the U.S. Department of Justice cleared the pending Disney transaction. This decision is a big step forward towards the completion of our Disney transaction and the creation of new “Fox.”
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.
We realize the Department of Justice’s decision will reshape the future course of our regional sports businesses and add uncertainty for our colleagues across the RSNs. Our RSNs are an incredibly strong asset offering television’s most valuable content and we are confident that whatever the outcome, the future of our regional sports business will continue to be incredibly bright.
Thank you again for your patience and understanding during this time of change. We will continue to communicate key events as they unfold.
Best,
Lachlan and James
There are still many other steps that must be taken before the Disney/Fox merger is complete.
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