Disney and its investment bankers will conclude the second round of their auction for nearly two dozen of Fox’s regional sports networks (RSNs) on Wednesday, though it is unclear just how many parties are interested in the networks, FOX Business has learned.
The second round bidding is likely to attract as many as three players, including Sinclair Broadcast Group, according to people with direct knowledge of the matter. In December, Major League Baseball Commissioner Rob Manfred told FOX Business, “We are interested in the regionals” but the bidding process continues to be hampered by lackluster interest and low-ball offers, these people say as bidders learn the digital rights are not included and remain property of MLB. It’s unclear if MLB will place a second-round bid; a spokesman had no immediate comment.
Bankers had hoped to have concluded the bidding by the second week in January, these people say. Instead, they delayed the second round to attract more bidders, people close to the matter tell FOX business.
It appears increasingly unlikely that Amazon—initially rumored to be interested in the RSNs during the first round of bidding—will place a second round bid, these people add. Rather, Amazon is working on a deal to buy a piece of one of Fox’s regional sports networks’ strongest assets, the Yankees Entertainment and Sports Network (YES). These people add Amazon did not place a first round bid but may do so later in the bidding process.
Bankers had told people they had as many as six interested parties for all the networks during the first round, and Disney initially sought as much as $20 billion for the package of RSNs, which includes YES. The first round bids, also flawed, ended in November as first reported by FOX Business.
The valuation of the RSNs was based on the $71 billion Disney paid for Fox’s entertainment assets. The mega media deal between 21st Century Fox Chairman Rupert Murdoch and Disney chief Bob Iger hands all the Fox entertainment assets except, Fox News Channel, FOX Business Network, Fox Sports, and owned and operated affiliates to Disney.
The RSNs must be sold to meet regulatory requirements since Disney already owns the giant sports network, ESPN. The completion of these final deals will create ‘New Fox’ , the parent of FOX Business and Fox News.
Allen & Company and JPMorgan are the investment bankers conducting the auction which will conclude in the coming weeks.
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One investment banker working on the deal said the delay is also a function of increased interest among various players including private equity firms like Apollo Global Management. Though it is unclear if any of these players have yet to place an official bid.