The Walt Disney Co. won antitrust approval to buy the key assets of 21st Century Fox following an agreement with the U.S. Justice Department that calls for the divestment of 22 regional sports networks.
That concession was long expected, as Disney owns ESPN, but the Justice Department filed a complaint this morning to block the entertainment conglomerate from acquiring those properties. A settlement was promptly reached, giving Disney 90 days from the closing of the Fox deal to sell off the regional sports networks.
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“American consumers have benefited 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,” Makan Delrahim, head of the Justice Department's antitrust division, 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.”
The settlement clears a major hurdle for Disney and Fox, but they still must maneuver antitrust laws around the globe before the merger can be finalized.
Disney dramatically increased its offer last week for the Fox assets to $71.3 billion in an attempt to fend off an unsolicited $64 billion bid by telecommunications conglomerate Comcast. Fox's shareholders were scheduled to consider Disney's original of $52.4 billion proposal on July 10, but that meeting was rescheduled after Comcast re-entered the picture.
At stake are such Fox assets as FX Networks, National Geographic, a 30-percent stake in Hulu, a 31.9-percent stake in U.K. pay-TV and broadband provider Sky, and the 20th Century Fox film and television production studios, which include the movie rights for the X-Men, Fantastic Four and Deadpool, among other properties.