Fox's roster of 22 regional sports networks, from YES Network to Fox Sports West, are valued at more than $22 billion. But who will the RSN buyers be?
While the NBA’s free agency frenzy winds down, sports media’s rumor mill is heating up. At the industry’s closest thing to league meetings—an annual gathering of power-players in Sun Valley, Idaho—the biggest storyline is Disney and Comcast’s bidding war for a large chunk of Fox’s movie and entertainment assets. But for the sports world, that contest is just the first domino.
No matter which company comes out on top, either is expected to turn around and offer up Fox’s roster of 22 regional sports networks (RSNs), from YES Network in New York to Fox Sports West in Southern California. Disney agreed to sell the networks as a stipulation from the Justice Department so as to avoid an anti-competitive situation given the company’s ownership of ESPN. Ahead of Fox shareholders’ vote on the potential deal July 27, Comcast is also lining up possible RSN buyers, according to Reuters.
Together, the networks were recently valued at over $22 billion, thanks largely to the TV rights they hold for 44 NHL, NBA and MLB teams. There has been pessimism about the future of the cable channels (MSG CEO Jim Dolan called RSNs “a slow, declining revenue stream”), but analyst Alan Wolk thinks that sports fans’ sustained fervor for their local teams make the regional networks must-haves for TV providers. And for online newcomers like DirecTV Now and Youtube TV, offering fans all of their local teams’ games can be a differentiator.
The potential enthusiasm for the 22 networks is clear by the number and variety of possible suitors that have been mentioned. A few of the categories of contenders include:
• Disney/Comcast: Whichever one doesn’t buy the bulk of Fox assets could settle for the RSNs, though it remains to be seen how likely the two are to do business after engaging in a monthslong bidding war.
• TV service distributors: AT&T and Charter each already have stake in several other RSNs.
• Teams themselves: The Yankees are reportedly primed to buy full control of YES Network, and other franchises could decide they want control over their local media coverage, though it would come with greater risk than accepting a yearly licensing check.
• Entertainment companies: CBS could bulk up its sports offerings, or Discovery, which owns European sports channels, could dive into the American market.
• Tech powers: Amazon, Google and Facebook have dabbled with smaller sports deals, and each would bring a different potential way to leverage more money out of owning the local rights. However, Wolk said it’s a bit early in the game for any of them to get involved this deeply given it would be a step out of their comfort zones, plus the fact that these are independent regional assets doesn’t play nicely with their national and international ambitions.
The most likely outcome, experts suggest, is some combination of those above names (plus others not mentioned, including private capital) splitting the collection of networks between multiple buyers. That would allow the new owners to face less anti-trust scrutiny and target networks in regions key to their business while most likely increasing the all-together haul Disney or Comcast can receive from the sale. It’s also worth noting that insiders don’t expect the change in ownership to affect viewer access or overall experience, at least in the short term. Of course, after the sales do go through, the networks are likely to change hands again—either through individual deals or larger mergers and acquisitions. Because just like in the NBA, it’s never too early to look ahead to next year’s free agent class.