Chris Ripley, CEO of the Sinclair Broadcast Group, offered some of his most extensive public comments Thursday about the Disney-run auction of the former Fox regional sports networks. He described it as a “very difficult” process that resulted in a final price tag that “way underachieved expectations” — happily for his company.
Sinclair led an investor group including Byron Allen that prevailed in a $9.6 billion deal that closed earlier this year. Wall Street analysts had initially projected a return in the range of $15 billion to $20 billion for the networks, which remain valuable draws in their markets despite increasing challenges in linear broadcasting.
Speaking on a panel at Advertising Week in New York, Ripley said the intense media and Wall Street scrutiny of the fate of the RSNs made the environment problematic. “It was literally in the paper every day,” he said. “In fact, if I was Disney and I had a choice, I would have pulled the sale. … Very hard to run an effective sale process if everybody knows what everyone else is doing.”
Disney, of course, did not have a choice. Looking to close its $71.3 billion acquisition of most of 21st Century Fox, which it did in March, the company was required to unload the networks by the U.S. Department of Justice given its ownership of ESPN.
Complicating things further, Ripley said, were the limitations on companies that otherwise would have been natural bidders. Comcast and AT&T already own significant RSN portfolios and likely would not have gotten regulatory approval. Fox opted out of re-acquiring the networks due to capital and strategic considerations in their slimmed-down Fox Corp. iteration. CBS, Ripley said, had interest in bidding, but was constrained in late 2018 and early 2019, by the Les Moonves-Joe Ianniello CEO transition and the developing Viacom merger.
“That really explains why you all read about these huge prices that these assets were supposed to go for, and when you saw the actual announcement they way under-achieved those expectations,” Ripley said. “If any one of those five other buyers had been involved with the process, you would have seen a price much more in line” with initial estimates. “Disney’s misfortune was our great fortune, and at the end of the day that’s how we prevailed,” he added. “Better to be lucky than good.”
Ripley spoke during a solo segment before a broader Advertising Week panel on sports media that touched on well-worn topics like how legalized betting and technology are changing the game. Former NBA Commissioner David Stern, NHL Commissioner Gary Bettman, YES Network President Jon Litner and Brooklyn Nets/Barclays Center CEO David Levy took the stage, but the conversation stayed in a low gear.
Moderator Sarah Kustok, a Brooklyn Nets game analyst on YES, never raised topics like Amazon’s role in the recent acquisition of YES by a group including the New York Yankees and Sinclair. Also missing was any mention of Levy’s notable exit from WarnerMedia (close on the heels of that of HBO chief Richard Plepler) after a nearly 30-year career at Turner. There was no audience Q&A.