Here's how that ginormous Disney-Fox deal will affect sports fans

By Bob Hille 15 December 2017
Here's how that ginormous Disney-Fox deal will affect sports fans

Get ready, sports fans, because that Disney deal to acquire parts of 21st Century Fox is going to hit you right in the viewing habits, not to mention, odds are, your pocketbook, too.

Connecting the dots, Disney owns ESPN and relatively buried in an entertainment-industry focused announcement of the deal was this: Pending federal approval, Disney will acquire all 22 Fox Sports Regional Networks that carry local coverage of no fewer than 44 MLB, NBA and NHL teams across the U.S. (Fox will keep Fox Sports, FS1, FS2 and the Big Ten Network, among its sports assets.) 

That doesn't include the RSNs' carriage of college football and basketball, plus the WNBA and MLS.

Notes the Washington Post:

"Let’s put it another way. The total price tag of the Disney-Fox deal is estimated to be $52.4 billion. CNBC’s David Faber estimates that Fox’s RSNs alone would be valued at $20 billion, or more than 38 percent of that amount. This isn’t an entertainment deal; it’s a sports deal."

So that's a TV-viewing component, if, for example, you're a St. Louis Cardinals and Blues fan used to watching Fox Sports Midwest or a Dallas Mavericks and Stars fan who tunes in to Fox Sports Southwest because they, along with the nearly two dozen other RSNs, will be rebranded under ESPN ownership, and you'll very likely see an ESPN imprint on them.

And here's how it benefits ESPN in a couple of very important ways:

1) It gives the sports network a stronger case to defend what it charges in carriage deals with pay-TV providers, who in turn can upsell consumers by arguing that they should pay top dollar for local game coverage of their beloved home team(s) on that premium tier.

2) With the local team coverage, ESPN — which has been hemorhaging cord-cutting customers (down 13 million subscribers from its peak of 100.13 million households in 2011, according to the Post) — also gets a future avenue to reach consumers as it prepares to launch ESPN Plus, its standalone service made possible by Disney's multibillion-dollar acquisition in August of majority ownership in Bamtech from MLBAM, the interactive media and Internet company of Major League Baseball.

In the near term, because of existing deals, the RSNs will maintain streaming rights, but eventually you could expect ESPN to acquire those rights — to ESPN Plus' benefit — as the existing deals expire.

“You have to look at the RSNs as a complement to ESPN, not an overlap,” Disney CEO Bob Iger said Thursday on CNBC, adding: “There will be a sharing of product so that we can infuse ESPN national with some more local content” and vice versa. “The result will be that both will be better.”

Either way, ESPN and Disney will look at another way: as a revenue stream.

And that, sports fans, puts the baseball, basketball and hockey puck in your court.

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Bob Hille

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