MANHATTAN (CN) – Removing antitrust barriers from a $71 billion merger, the Department of Justice told Disney on Wednesday that it can buy most of 21st Century Fox’s assets as long as it divests 22 regional sports networks.
“Cable sports programming is one of the most popular forms of entertainment in the United States,” the 10-page complaint filed in New York states. “Disney’s proposed acquisition of Fox’s assets would combine two of the country’s most valuable cable sports properties — Disney’s ESPN franchise of networks and Fox’s portfolio of regional sports networks (‘RSNs’) — and thereby likely substantially lessen competition in the multiple designated market areas (‘DMAs’) throughout the United States in which these two firms compete.”
“If consummated, the proposed acquisition would eliminate the substantial head-to-head competition that currently exists between Disney and Fox and would likely result in higher prices for cable sports programming in each of the DMA Markets,” the complaint states.
Assistant Attorney for Antitrust General Makan Delrahim filed the complaint simultaneously this morning with a consent decree that has been in the works for months, according to CNN reporting.
That 12-page agreement requires a federal judge and shareholders’ approval.
“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,” Delrahim said 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.”