Who will buy Fox's 22 regional sports networks?

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The US Department of Justice on Wednesday granted provisional approval to Disney’s $71.3 billion purchase of 21st Century Fox’s entertainment assets. The news is a win for Disney, though the deal is not done until Fox’s board votes—Comcast (CMCSA) could still make Fox another offer, raising the stakes and forcing Disney (DIS) to pay more.

If Disney ends up the victor, it will get Fox’s (FOX) valuable library of original television, including “Modern Family” and “The Simpsons.” It will get lucrative Fox film franchises like the “X-Men,” “Deadpool,” and “Avatar.” It will get the FX and National Geographic networks. It will get Fox’s ownership stake in the joint venture Hulu, making Disney the majority owner of Hulu.

But it will not, after all, get Fox’s 22 regional sports networks (RSNs).

The DOJ, in its approval, gave one condition, by filing a civil antitrust lawsuit to block the acquisition and at the same time filing a proposed settlement to that lawsuit: Disney must sell off those networks within 90 days of the acquisition. Disney accepted the condition.

“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,” DOJ official Makan Delrahim said in the DOJ’s press release, which continued, “Without the required divestitures, the proposed acquisition would likely result in higher prices for cable sports programming licensed to multichannel video programming distributors (“MVPDs”) in each of the local markets that the RSNs serve.”

Much had been written about all the things that Disney could do with those regional sports networks, and how they might boost the ESPN ecosystem.

Nevermind. The DOJ thinks that owning the RSNs, when it already has ESPN, would give Disney unfair pricing power. Now the question becomes: Who will buy the RSNs?

A reporter goes on air for YES Network before the Los Angeles Lakers played the Brooklyn Nets in Los Angeles on Nov. 20, 2012. (REUTERS/Danny Moloshok)
A reporter goes on air for YES Network before the Los Angeles Lakers played the Brooklyn Nets in Los Angeles on Nov. 20, 2012. (REUTERS/Danny Moloshok)

Fox’s 22 regional sports networks are spread across the country, but concentrated in the Midwest: Fox Sports Kansas City, Fox Sports Oklahoma, SportsTime Ohio, and Fox Sports Midwest are among them. They show live games of more than 44 MLB, NBA, and NHL teams (no NFL) and produce more than 5,500 live games per year.

The best-known of the portfolio, arguably the crown jewel, is YES Network, which is jointly owned by Fox and the New York Yankees and broadcasts the games of the Yankees and the Brooklyn Nets.

The Yankees could simply buy back YES from Fox, an option the team has already been considering even before the DOJ condition to Disney.