It might not be the sexiest reason for the long wait to see Fox brought under the Disney banner, but one of the sticking points for the merger has been the size and strength of Fox and Disney in international markets.
Bloomberg give us an insight into one of those issues, as Disney prepare to sell the Fox Sports channels in Brazil and Mexico to win regulatory approval there, a step which will go a long way towards sealing its $71 billion takeover of 21st Century Fox Inc. entertainment assets.
The two countries are among the last major hurdles for the deal. Disney has agreed to sell Fox’s 22 regional sports networks in the U.S. after the Justice Department said the ownership of those channels and ESPN would give the company undue influence in the sports broadcasting business. The company also will sell its 50 percent stake in A+E Networks in Europe to satisfy regulators there.
Disney faced opposition to the merger from Brazil’s Globo Comunicacao e Participacoes SA, which raised concerns over concentration in sports networks. Mexico’s Grupo Televisa SAB, the world’s largest producer of Spanish-speaking content, and Globo would be their countries’ sole competitors in sports networks if the divestments weren’t made, said the people. The U.S. Justice Department’s decision to demand divestitures also influenced the Brazilian and Mexican regulators, said one person.
Disney Chief Executive Officer Bob Iger failed to get a better deal after flying to Brazil to meet the antitrust board. As a result, the companies decided hanging on to the sports channels wasn’t worth jeopardizing the takeover, said two of the people.
Mexico’s antitrust regulator also looked into the deal, specifically examining movie distribution and merchandise matters, and gave it a green light earlier this month.