Sinclair Broadcast Group Inc. will buy 21 Fox regional sports networks, including Fox Sports Detroit, from Walt Disney Co. for $9.6 billion, a bet…
Sinclair Broadcast Group Inc. will buy 21 Fox regional sports networks, including Fox Sports Detroit, from Walt Disney Co. for $9.6 billion, a bet that the local-TV company can become a cable-sports powerhouse.
Sinclair will acquire the business via a new subsidiary called Diamond Sports Group, the company said on Friday. Detroit native Byron Allen, the former comedian who founded Entertainment Studios and owns the Weather Channel, is investing in the business and will help supply content.
Investors applauded the transaction, sending Sinclair shares up as much as 16 percent in late trading on Friday. Even before the surge, the stock had gained 71 percent this year.
Disney agreed to sell the networks as part of its already-completed acquisition of 21st Century Fox Inc.’s entertainment assets. That attracted a varied cast of suitors, including John Malone’s Liberty Media Corp., which teamed up with Major League Baseball, and Ice Cube’s Big3 U. S. basketball league. The entertainer lined up Will Smith, Serena Williams and Snoop Dogg as content partners for his unsuccessful bid.
The networks have about 74 million subscribers and generated $3.8 billion in revenue last year. They have local broadcast rights to 42 professional teams, including Major League Baseball, National Basketball Association and National Hockey League squads.
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Fox Sports Detroit televises nearly every game for the Detroit Tigers, Detroit Red Wings and Detroit Pistons.
“While consumer viewing habits have shifted, the tradition of watching live sports and news remains ingrained in our culture,” Sinclair Chief Executive Officer Chris Ripley said in a statement.
