Sinclair Buys Disney

Sinclair buys Disney.
   
Sinclair Broadcast Group buys 21 Regional Sports Networks and Fox College Sports from The Walt Disney Company for $10.6 billion.
   
The RSNs in the deal are Fox Sports Arizona, Fox Sports Detroit, Fox Sports Florida, Fox Sports Sun, Fox Sports North, Fox Sports Wisconsin, Fox Sports Ohio, SportsTime Ohio, Fox Sports South, Fox Sports Carolina, Fox Sports Tennessee, Fox Sports Southeast, Fox Sports Southwest, Fox Sports Oklahoma, Fox Sports New Orleans, Fox Sports Midwest, Fox Sports Kansas City, Fox Sports Indiana, Fox Sports San Diego, Fox Sports West, and Prime Ticket.
    
This gives Sinclair local broadcast rights to 42 professional teams. 14 Major League Baseball teams, 16 National Basketball Association teams, and 12 National Hockey League teams. The deal does not include 21st Century Fox's equity interest in the Yes Network, the disposition of which is a requisite part of an agreement with the US Department of Justice. 
   
Sinclair's existing sports business is Marquee Sports Network (a joint venture with the Chicago Cubs), Tennis Channel and Tennis Media Company (dedicated to live tennis events and tennis lifestyle), Stadium (a joint venture focused on college sports and professional highlights), Ring of Honor Wrestling (professional wrestling), and a robust and ebullient high school ticket (Friday Night Rivals and Thursday Night Lights).
    
Byron Allen joins the deal as an equity and content partner of a separate subsidiary of Sinclair called Diamond Sports Group. Allen, the founder of Entertainment Studios, bought The Weather Channel in 2018.
Chris Ripley of Sinclair said: ‘This is an exciting transaction for Sinclair to be able to acquire highly complementary assets. While consumer viewing habits have shifted, the tradition of watching live sports and news remains ingrained in our culture. As one of the largest local news producers in the country and an experienced producer of sports content, we are ideally positioned to transfer our skills to deliver and expand our focus on greater premium sports programming.
The transaction is expected to be highly accretive to free cash flow and brings consolidated net leverage to 4.7 times and 5.1 times through the preferred financing. This acquisition is an extraordinary opportunity to diversify Sinclair's content sources and revenue streams with high-quality assets that are driving live viewing. We also see this as an opportunity to realize cross-promotional collaboration and synergistic benefits related to programming and production.’
    
Christine McCarthy of The Walt Disney Company said: ‘We are happy to have reached this agreement with Sinclair for the sale of these 21 RSNs, subject to the conditions of the consent decree with the US Department of Justice.’ 
   
Guggenheim Securities, Deutsche Bank Securities, RBC Capital Markets, Pursuit Advisors, and Moelis & Co are acting as Sinclair's financial advisers. Fried, Frank, Harris, Shriver & Jacobson LLP, Pillsbury Winthrop Shaw Pittman LLP, Latham & Watkins LLP, and Thomas & Libowitz are acting as legal advisers.
    
Allen & Co and JP Morgan are acting as Disney's financial advisers. Cravath, Swaine & Moore, and Covington & Burling are acting as legal advisers.
    
JPMorgan Chase Bank, Deutsche Bank AG New York Branch, Deutsche Bank Securities, Royal Bank of Canada, Bank of America, and Merrill Lynch, Pierce, Fenner & Smith are providing committed debt financing. Committed preferred equity financing will be provided by JPMorgan Chase Funding.

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