Deal estimated at $650 mil
NEW YORK — The Walt Disney Co. and Henry T. Nicholas III have apparently hashed out the general outline of a sale of Disney’s Anaheim Angels and Mighty Ducks sports teams to the Orange County billionaire.
A Disney spokeswoman declined to comment. However, Nicholas is an eager buyer and the two sides have been talking for a number of weeks as the struggling Mouse reviews its holdings and looks to unload non-strategic assets.
$650 mil offer?
While analysts had valued the teams at about $400 million, a report on Disney-owned ESPN.com late Monday indicated that Nicholas, the chairman of Anaheim-based semiconductor group Broadcom, could be willing to pay as much as $650 million.
ESPN.com is an online information unit of sports cable juggernaut ESPN. It said Nicholas wants to build an indoor snowboard park adjacent to Arrowhead Pond, home to the National Hockey League’s Ducks.
Disney recently agreed to sell its magazine group, Fairchild Publications, to Conde Nast — also for a reported $650 million.
Sources cautioned that no sports agreement is likely to be announced until later this fall and that actually closing the deal will take much longer. Disney, in fact, cannot reveal any specific financial info on the Angels to prospective buyers without the consent of the Major League Baseball Commission. As of late last week, the company hadn’t requested that permission, although it has held informal discussions with the commission.
A commission spokesman wasn’t available for comment.
Ripe for sale
As Disney looks to cut costs and boost earnings, its teams, which were meant to be the cornerstone of an unrealized regional sports network, are seen as ripe for the auction block.
Three years ago, Disney signed a deal to pay $140 million for the Angels, which has only been completed since the death of former majority owned Gene Autry. They paid a $50 million franchise fee for the Ducks. Both teams lose money, and Disney has spent about $90 million to renovate the Angels’ stadium, Edison Field — for which it might want to be reimbursed in any Angels sale.
And, more importantly, Disney didn’t have much luck pitching its regional sports network to local cable operators. The reluctance was partly due to Disney’s tough negotiating stance with cable systems over licensing fees for highly rated ESPN. After all, operators already carried Fox Sports West regional cable net and a number of them had locked in distribution deals with Fox Sports 2, a second channel, before ESPN was out of the gate.
As a result, a little over a year ago, Disney abandoned plans for ESPN West and signed a 10-year deal for its teams with Fox.
(John Dempsey in New York contributed to this article.)