NEW YORK (CelebrityAccess) — US regulators have approved Walt Disney Co’s plan to acquire the lion’s share of 21st Century Fox, clearing the way for the $71.3bn deal with a few caveats.
On Wednesday, the U.S. Department of Justice said the deal can go ahead provided that Disney divests 22 regional sports networks that Fox currently owns.
The DoJ expressed concern that without the required divestitures, the proposed acquisition would likely result in higher prices for cable sports programming licensed to multichannel video programming distributor in the affected markets.
To streamline agency clearance, Disney agreed to divest the 22 RSNs rather than continue with the Antitrust Division’s ongoing merger investigation, the DoJ said.
“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,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “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.”
Currently, Fox’s regional sports networks are distributed to more than 60 million subscribers and hold local rights to a majority of major league baseball teams. Disney is the corporate parent to sports content producers such as ESPN, as well as local channels.
The blockbuster acquisition comes as Disney ramps up its efforts to compete in the digital content world with rivals such as Amazon and Netflix. The deal includes most of Fox’s entertainment assets, but not Fox’s news and network sports divisions.
The DoJ’s approval of the acquisition makes the deal much more likely, but Fox shareholders must still approve the deal.