In the over crowded race for Disney’s 21 regional sports channels, Byron Allen and Sinclair Broadcast Group have come out on top. As a minority investor in Sinclair, Allen will benefit from the $10.6 billion acquisition as he looks to expand his media entertainment empire. For Disney, will this sale be enough to start paying down the massive debt they’re carrying due to its $71.3 billion 21st Century Fox deal?
The Breakdown You Need to Know
So far Disney has reduced its debt amount from $26.09 billion in 2017 to $20.66 billion last year. The mouse house sold its 39% stake in London based Sky to Comcast for $15.3 billion in September, and temporarily suspended its share repurchase program, all of which how to lower it debt load. Now with the sale of these networks to Sinclair, they should be able to cut down their debt even further.
Regional sports networks, or RSNs, which own the rights to broadcast professional sports games across the country fit perfectly into Allen’s formulaic approach to spurring the growth of his Entertainment Studios media properties. He is already the owner of The Weather Channel and as part of the agreement will provide content to the sports networks.
“These are very valuable assets, and they are hard to come by,” Allen said to Bloomberg. “No one would sell them if they didn’t have to. And this is a situation where they had to.”
Allen’s Media Slam Dunk: Disney had to get rid of the RSNs by mid-June to avoid antitrust concerns raised by its $71.3 billion merger with Fox. Regulators argued that since Disney owned ESPN they would effectively have a monopoly on sports networks. The deal doesn’t include the New York Yankees team’s regional sports network “Yes,” this network will remain under Disney’s umbrella.