Disney has to divest after Fox deal closes

“New” Fox, the company that will own the Fox Broadcast Network, Fox News and other assets after the Walt Disney Co. acquires 21st Century Fox, said it won’t try to buy the regional sports networks Disney will have to sell after the deal closes.

Disney, which controls sports giant ESPN, has agreed to divest the Fox’s Regional Sports Networks as part of a consent decree with the Justice Department, which approved the acquisition of the other Fox cable and studio assets.

In a filing with the Securities and Exchange Commission Fox said that is in discussions with potential investors regarding financing and that it “confirms that it does not intend to bid for any of the Fox regional sports networks.”

There had been some reports that Fox might want to buy those 22 networks back--and that it could get them at a substantial discount to the price Disney was paying for them as part of the overall 21st Century Fox deal.

Selling the sports networks has proved harder than expected for Disney, which had been reportedly hoping to get $20 billion in a sale.

Among those reportedly interested in buying some or all the networks have been Amazon, Major League Baseball, Viacom (with rapper and Big3 basketball league founder Ice Cube), Sinclair and some private equity investors.

"We expect investors will view this positively for New Fox. Buying the RSNs would have levered up New Fox and investors are generally bearish on RSNs," said analyst Doug Mitchelson of Credit Suisse. The new is a "a minor negative" for Disney, which has one less buyer for the nets.