The U.S. Department of Justice (DOJ) has approved Disney’s proposed acquisition of various assets of 21st Century Fox, with the condition that Fox’s 22 regional sports networks aren’t among them.
With Disney also owning ESPN, the DOJ had flagged concerns over a sports broadcasting monopoly and is giving Disney 90 days after the potential close of the deal to divest the networks. If Disney didn’t consent to the condition, the DOJ was set to move ahead with an antitrust suit it had filed concurrently with its proposed settlement that aimed to “resolve the competitive harm alleged in the lawsuit.”
Thus, Disney opted to agree to the condition rather than continue with an ongoing investigation of the merger by the Antitrust Division.
“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, in a statement. “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.”
There are still hurdles to clear with the proposed deal, however. Among them: regulatory approvals outside of the U.S., shareholder approvals and a potential new bid from Comcast, which has also been aggressively pursuing a purchase of the 21st Century Fox assets.