Bidder In Disney Sale Faults Charter -- WSJ
12 April 2019 - 5:02PM
Dow Jones News
By Joe Flint
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (April 12, 2019).
One of the bidders for regional sports networks that Walt Disney
Co. is selling has lodged a complaint with federal regulators
alleging that cable operator Charter Communications Inc. is
undermining the sale process by threatening to drop the channels
from its systems.
In letters to the Federal Communications Commission and the
Justice Department, Big3 Basketball LLC alleged that Charter's
conduct is depressing prices in the auction and suggested the
situation could benefit Charter's largest shareholder, Liberty
Media Corp., which is also a bidder.
Big3 said it has engaged in negotiations with Charter over the
price the cable company would pay to carry the sports networks
should Big3 be the winning bidder. Big3 said the discussions broke
down and it now fears the channels will lose carriage.
"Charter's conduct risks effectively excluding Big3 from the
bidding process and tainting the auction," the company told the
FCC. "It has been suggested to Big3's ownership that Charter has
disseminated its threat to drop the (regional sports networks) to
other members of the industry, thereby suppressing auction prices,
chilling bidding, and ultimately hurting Disney's ability to secure
the best price for the (channels)," the letter said.
In a statement, Charter said it "welcomes the opportunity to
discuss a future carriage agreement for these networks with
whomever ultimately owns them including Big3. Regardless of who
owns the programming, we approach all negotiations with the same
singular objective of reaching carriage agreements that best meet
the needs of our customers."
Big3, which runs a 3-on-3 basketball league with backing from
entrepreneur Jeff Kwatinetz and rapper and actor Ice Cube, told the
FCC it lacks the leverage to compel Charter to carry the regional
sports networks.
Disney is divesting 22 regional sports networks it acquired as
part of its purchase of 21st Century Fox entertainment assets in
order to comply with the government's conditions for approval of
the deal.
One of the networks -- the YES channel in New York -- is near a
deal to be sold to the New York Yankees, who already own 20%, and
Sinclair Broadcast Group Inc., RedBird Capital Partners LLC and
Amazon.com Inc. The deal values the channel at $3.5 billion.
Other bidders for the channels include Sinclair and Major League
Baseball. Final bids are due on April 15, people familiar with the
process said.
Write to Joe Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
April 12, 2019 02:47 ET (06:47 GMT)
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