Advanced Television

Sinclair pays $10.6bn for Disney sports

May 7, 2019

Sinclair Broadcast Group and The Walt Disney Company  have entered into a definitive agreement under which Sinclair will acquire the equity interests in 21 Regional Sports Networks (RSNs) and Fox College Sports, which were acquired by Disney in its acquisition of 21st Century Fox.

The transaction ascribes a total enterprise value to the RSNs equal to $10.6 billion (€9.4bn), reflecting a purchase price of $9.6 billion, after adjusting for minority equity interests.

Disney had to sell the RSNss under an agreement it struck with the Department of Justice that allowed the media conglomerate to proceed with its purchase of 21st Century Fox. Completion of the transaction is subject to customary closing conditions.

The RSN portfolio, which excludes the YES Network, is the largest collection of RSNs in the marketplace, with an extensive footprint that includes exclusive local rights to 42 professional teams consisting of 14 Major League Baseball (MLB) teams, 16 National Basketball Association (NBA) teams, and 12 National Hockey League (NHL) teams.

“This is a very exciting transaction for Sinclair to be able to acquire highly complementary assets,” commented Chris Ripley, President and CEO of Sinclair. “While consumer viewing habits have shifted, the tradition of watching live sports and news remains ingrained in our culture. As one of the largest local news producers in the country and an experienced producer of sports content, we are ideallypositioned to transfer our skills to deliver and expand our focus on greater premium sports programming. The transaction is expected to be highly accretive to free cash flow and brings consolidated net leverage to 4.7x and 5.1x through the preferred financing. This acquisition is an extraordinary opportunity to diversify Sinclair’s content sources and revenue streams with high-quality assets that are driving live viewing. We also see this as an opportunity to realise cross-promotional collaboration, and synergistic benefits related to programming and production.”

“We are pleased to have reached this agreement with Sinclair for the sale of these 21 RSNs, subject to the conditions of the consent decree with the U.S. Department of Justice,” added Christine McCarthy, Senior Executive Vice President and CFO, The Walt Disney Company.

The RSNs to be acquired by Sinclair are: Fox Sports Arizona, Fox Sports Detroit, Fox Sports Florida, Fox Sports Sun, Fox Sports North, Fox Sports Wisconsin, Fox Sports Ohio, SportsTime Ohio, Fox Sports South, Fox Sports Carolina, Fox Sports Tennessee, Fox Sports Southeast, Fox Sports Southwest, Fox Sports Oklahoma, Fox Sports New Orleans, Fox Sports Midwest, Fox Sports Kansas City, Fox Sports Indiana, Fox Sports San Diego, Fox Sports West, and Prime Ticket. Also included in the acquisition is Fox College Sports.

Sinclair has drawn criticism in recent times for pushing a right-wing agenda. Trump is a known fan.


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