Source: The Deal, Law360
Pillsbury represented Sinclair Broadcast Group, Inc., as finance, securities and FCC regulatory counsel, in its definitive agreement with The Walt Disney Company to acquire the equity interests in 21 Region Sports Networks and Fox College Sports, which were acquired by Disney in its acquisition of Twenty-First Century Fox, Inc.
The transaction brings a total enterprise value of the sports networks to $10.6 billion, reflecting a purchase price of $9.6 billion. Completion of the transaction is subject to customary closing conditions, including the approval of the U.S. Department of Justice.
The RSN portfolio is the largest collection of RSNs in the marketplace today, with an extensive footprint that includes exclusive local rights to 42 professional teams consisting of 14 Major League Baseball teams, 16 National Basketball Association teams, and 12 National Hockey League teams. In 2018, the portfolio delivered $3.8 billion in revenue across 74 million subscribers.
The RSNs will be acquired via a newly formed indirect wholly-owned subsidiary of Sinclair, Diamond Sports Group LLC. Byron Allen has agreed to become an equity and content partner in a newly formed indirect wholly-owned subsidiary of Sinclair and an indirect parent of Diamond. Allen, who bought The Weather Channel in 2018, is the founder, chairman and Chief Executive Officer of Entertainment Studios, a global media, content and technology company.
"This is a very exciting transaction for Sinclair to be able to acquire highly complementary assets," commented Chris Ripley, President and CEO of Sinclair. "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."
Last year, Disney and 21st Century Fox entered into a consent decree with the U.S. Department of Justice that allowed Disney's acquisition of 21st Century Fox to proceed while requiring the subsequent sale of the RSNs. Disney completed its $71 billion acquisition of 21st Century Fox in March.
The cross-office, multidisciplinary Pillsbury team included Communications partner Miles S. Mason; Corporate partner Jeffrey B. Grill and associates John C. C. Byrne, II, Ryan Brewer and Ella M. Lvov, and Finance partners Michael E. Michetti, Joel M. Simon and Joseph M. Fastiggi, special counsel Heidi Spalholz, senior associate Cecilia Wang and associate Marissa Prieto.