It’s not yet known who will acquire Fox’s regional sports networks (RSNs), which must be sold in order for The Walt Disney Company to complete its $71.3 billion purchase of a major portion of 21st Century Fox.
Even so, the American Cable Association is urging the U.S. Justice Department “to protect consumers” by prohibiting the divestiture of the RSNs to two potential types of buyers.
In a letter submitted Monday (10/15) to the DOJ as part of its Tunney Act review, the ACA said the Justice Department “would only create new antitrust problems” if Disney were allowed to sell the RSNs to an in-market ABC, CBS, NBC or Fox station — or to an in-market multichannel video programming distributor (MVPD).
In its view, “Permitting either kind of common ownership would lead to higher retail prices for traditional pay-TV service,” the ACA asserts.
Yet, in reality, who else would Disney sell the RSNs to? Comcast is a possibility, given its regional NBC Sports networks in markets such as Chicago and San Francisco. MSG Networks is another possible player, which might look like a better potential acquisitor rather than one of the nation’s largest media giants.
In its letter, ACA argued that permitting an in-market Big 4 broadcaster to purchase a Fox RSN would create a similar problem to that identified in the original transaction. How so? ACA believes it would allow a single firm to threaten to withhold two sets of must-have programming, thereby leading to an increase in MVPD licensing fees.
At the same time, ACA contends, “permitting an in-market MVPD to purchase an RSN would create a vertical integration problem similar to the one the DOJ identified in blocking the AT&T-Time Warner merger. The combined entity would have greater leverage to threaten to withhold RSN programming from rival MVPDs than would a stand-alone RSN owner, thereby leading to increased MVPD licensing fees.”
Commenting on the matter, ACA President/CEO Matthew M. Polka said, “DOJ’s Antitrust Division has the sole discretion to approve a divestiture party for Fox’s RSNs. It should modify the proposed Final Judgment to make clear beforehand that it will use such discretion to prohibit any divestiture to a same-market broadcaster or same-market MVPD. The public interest dictates such a modification.”
