November 20, 2018 / 3:00 PM / 22 days ago

Amazon, Blackstone among bidders for 22 Disney sports networks: CNBC

(Reuters) - Amazon.com Inc and private equity firm Blackstone Group are bidding for Walt Disney Co’s 22 regional sports networks, including New York-focused Yes Network, CNBC reported on Tuesday, citing sources familiar with the matter.

FILE PHOTO: The logo of the web service Amazon is pictured in this June 8, 2017 illustration photo. REUTERS/Carlos Jasso/Illustration/File Photo

Disney, which is buying Twenty-First Century Fox Inc’s film and television assets, had said it would divest 22 of Fox’s regional sports networks as part of its agreement with the U.S. Department of Justice.

The story gave no indication about the value of the bids. Sources had earlier told here Reuters that these networks could be worth as much as $20 billion.

An unnamed sovereign wealth fund and the New York Yankees are also bidding for the New York network, CNBC said.

If Amazon clinches the deal, it would pay a higher price than the $13.7 billion the retail giant paid to buy Whole Foods Co last year.

Amazon has moved aggressively into TV to bolster its Prime membership service, which offers free delivery and content for a flat monthly fee. Its bid for the sports assets underlines its ambition to take on traditional pay-TV broadcasters in one of their most reliable sources of revenue.

“I’ve always viewed Amazon’s video strategy as having three elements to it – Prime Instant Video, the Channels business and live ad-supported TV,” Atlantic Equities analyst James Cordwell said.

“The latter is the least built-out, but the RSNs (regional sports networks) would fit well in terms of establishing this part of the offering.”

Amazon already has rights to air 20 English Premier League soccer matches, giving its Prime Video online streaming service a foothold in the most-watched sports league in the world. It also has rights to America’s National Football League and National Hockey League.

Sports leagues are anticipating that the big tech companies will bid aggressively when rights come up for renewal in the next few years.

Facebook and Twitter Inc already stream live sports events.

Fox Executive Chairman Lachlan Murdoch had hinted earlier this month that it could buy back the regional sports networks it sold to Disney.

Fox did not submit a bid in the first round for the networks although there was the potential that they would join in the second round, CNBC reported.

The second round of bids are expected before the year ends and due diligence on the bids begin next week.

While Amazon declined to comment, Disney, New York Yankees and Blackstone did not respond to Reuters request for comment.

Shares of Walt Disney shares were down about 2 pct at $113.16, while those of Amazon were marginally higher.

Reporting by Vibhuti Sharma and Arjun Panchadar in Bengaluru; Editing by Anil D'Silva and Arun Koyyur

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