Sinclair Buys 21 Regional Sports Networks from Disney

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Sinclair Broadcast Group is to acquire the equity interests in 21 regional sports networks and Fox College Sports, which were acquired by Disney in its acquisition of 21st Century Fox.

The transaction puts a total enterprise value to the regional sports networks equal to $10.6 billion, reflecting a purchase price of $9.6 billion, after adjusting for minority equity interests. The portfolio, which excludes the YES Network, is the largest collection of regional sports networks in the U.S. marketplace, with a footprint that includes exclusive local rights to 42 professional teams consisting of 14 MLB teams, 16 NBA teams and 12 NHL teams. In 2018, the portfolio delivered a combined $3.8 billion in revenue across 74 million subscribers.

The regional sports networks will be acquired via a newly formed indirect wholly owned subsidiary of Sinclair, Diamond Sports Group. Byron Allen has agreed to become an equity and content partner in a newly formed indirect wholly owned subsidiary of Sinclair and an indirect parent of Diamond, RSN Holding Company.

“This is a very exciting transaction for Sinclair to be able to acquire highly complementary assets,” commented Chris Ripley, president and CEO of Sinclair. “While consumer viewing habits have shifted, the tradition of watching live sports and news remains ingrained in our culture. As one of the largest local news producers in the country and an experienced producer of sports content, we are ideally positioned to transfer our skills to deliver and expand our focus on greater premium sports programming.”

Ripley continued, “The transaction is expected to be highly accretive to free cash flow and brings consolidated net leverage to 4.7x and 5.1x through the preferred financing. This acquisition is an extraordinary opportunity to diversify Sinclair’s content sources and revenue streams with high-quality assets that are driving live viewing. We also see this as an opportunity to realize cross-promotional collaboration, and synergistic benefits related to programming and production.”

“We are pleased to have reached this agreement with Sinclair for the sale of these 21 RSNs, subject to the conditions of the consent decree with the U.S. Department of Justice,” said Christine McCarthy, senior executive VP and chief financial officer at The Walt Disney Company.