U.S. Justice Department approves Fox-Disney deal
The U.S. Justice Department confirmed on Wednesday that it has given conditional approval for Disney to acquire a variety of assets from 21st Century Fox.
Disney made a $71.3 billion bid to acquire many of Fox's assets, including its film and TV studios, FX cable network and other international operations.
The deal is contingent, however, on Disney giving up Fox's regional sports networks. Fox currently operates 22 RSNs, including YES network, Prime Ticket and Fox Sports Florida, among others, which provide coverage of local sports teams.
Together they recorded $2.3 billion in yearly profit, according to independent equity research firm, MoffettNathanson. Disney already said in filings it would be prepared to give them up as part of the approval process.
Makan Delrahim, assistant attorney general and head of the Justice Department antitrust division, said in a statement on Wednesday: “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," Delrahim said in the statement.
The statement did not address concentration in the movie industry, where together the two companies would control about 45 percent of the world's box office revenue, according to BTIG Research media analyst Rich Greenfield.
Comcast, which owns NBCUniversal, is also still in the running for Fox's assets. The WSJ reported that the company has been talking to private equity firms and other third parties about partnering in future bids for the Fox assets. Comcast had bid $65 billion for Fox, and Disney raised its bid to $71.3 billion.
Comcast is the owner of NBCUniversal, the parent company of NBC News.
21st Century Fox is not selling its Fox broadcast network and is also committed to retaining its news and sports cable channels.