×
You will be redirected back to your article in seconds

Disney-Fox Merger Nears Completion as Brazil Grants Approval With Conditions

Disney took a big step closer to completing its $71.3 billion purchase of 21st Century Fox with Brazil’s conditional approval of the deal Wednesday.

In an agreement with Brazil’s antitrust agency, Disney will sell the Fox Sports cable channel that serves the largest media market in South America. Brazilian regulators focused on Disney’s ownership of ESPN and Fox Sports as giving it too much power over sports rights and related deals.

Approvals from Brazil and Mexico are believed to be the last hurdles Disney needs to clear before formally taking ownership of most of 21st Century Fox’s assets. There’s been speculation that the historic union of two Hollywood studios could be completed as early as next week.

On Wednesday, Brazil’s Administrative Council for Economic Defense approved the Disney-Fox deal contingent on the agreement to sell Fox Sports, among other measures negotiated in a Concentration Control Agreement. The deadline for the sale remains confidential, the council said.

The merger had generated competition concerns in Brazil’s pay-TV sports channel market, which includes ESPN and Fox Sports. The antitrust council noted that “currently, there is only one rival…capable of competing with these channels.” Regulators in Mexico are said to have similar concerns about Disney’s ownership of ESPN and Fox Sports properties in the country.

“In the board’s assessment, the [merger] would leave the pay-TV sports channel sector even more concentrated, with an elevated probability of an exercise of market power on Disney’s part,” Brazilian regulators wrote. “Beyond this, there would be the potential of a reduction in the quality and diversity of available sports content, as well as a rise in costs that could be passed on to consumers.”

The sale of Fox Sports is designed to ensure that the market retains the same number of sizable competitors in sports, with SporTV (from GloboSat), ESPN and whichever business buys Fox Sports’ assets.

“The package of assets to be divested includes all the sports events broadcast rights belonging to Fox Sports, all the contracts with pay-TV operators, key employees, real estate, and transmission equipment,” regulators wrote.

Disney has also agreed, for a fixed period, not to sign agreements with the sports leagues that have agreements with Fox Sports, not to try to reacquire those rights, and to offer free use of the Fox brand to the buyer of Fox Sports.

The regulators’ statement indicated that Brazilian antitrust authorities have conferred with their Mexican counterparts in evaluating the transaction, which suggests that approval from Mexico could be coming within days. “In Latin America, the close dialogue between agencies in Brazil, Mexico and Chile resulted in a coordinated solution to the case,” the Brazilian council wrote.

More Biz

  • Hollywood celebrated the individuals redefining "on-screen

    Media Access Awards Honors Individuals Increasing Representation for Disabilities

    Hollywood celebrated individuals redefining “on-screen representation for the disability community” with the Media Access Awards, in partnership with Easterseals, at the Beverly Hilton Thursday. Norman Lear and Jimmy Kimmel kicked off the event, which featured Camryn Manheim, CJ Jones, Coby Bird and “The Peanut Butter Falcon” actors Zack Gottsagen and John Hawkes presenting awards along [...]

  • 'Roxanne' Singer Arizona Zervas Signs With

    'Roxanne' Singer Arizona Zervas Signs With Columbia

    Hotly tipped singer-songwriter Arizona Zervas, whose viral hit “Roxanne” is in the top 40 of the Billboard Hot 100,  has signed with Columbia, Variety has confirmed. Since the release of the track on Oct. 10, “Roxanne” has reached nearly 50 million streams on Spotify. The single topped Spotify U.S. top tracks chart for an uninterrupted [...]

  • Jax Media at Variety New Leaders

    Jax Media Accepts Variety's Creative Leadership Award at New Leaders Cocktail Party

    This year’s Variety New Leaders event, presented by City National Bank, honored innovative visionaries in entertainment. The cocktail party was hosted on a chilly Thursday night in Lower Manhattan’s Jimmy Rooftop Bar at the James Hotel. Patrick McCarthy, senior VP and head of marketing for City National Bank, kicked off the event highlighting the new [...]

  • taylor swift, scott borchetta and scooter

    Rage Against the Big Machine: What's Driving the Taylor Swift Showdown

    The latest Taylor Swift-Scooter Braun-Scott Borchetta kerfuffle involves the sort of music business minutiae that doesn’t commonly interest the general public — in fact, it’s probably safe to say that untold thousands if not millions of people are suddenly familiar with the concept of re-recording old masters. But in blasting Braun on social media and [...]

  • Redbox

    Redbox Settles Disney Suit, Agrees Not to Sell Download Codes

    Redbox has settled its litigation with Disney, agreeing not to resell codes that allow customers to download movies. Redbox has traditionally offered DVDs for rent through its distinctive kiosks. In October 2017, the company also began offering download codes at a considerable discount compared to the price on iTunes, Amazon or other services. Redbox did [...]

  • Shari Redstone: ViacomCBS 'Can Compete With

    Shari Redstone: ViacomCBS 'Can Compete With the Best of Them'

    Shari Redstone is emphatic: ViacomCBS has plenty of resources and the scale to compete in the new world order for media giants. “We absolutely have enough scale,” Redstone said Friday morning during her Q&A held as part of the Paley Center for Media’s International Council Summit in New York. “We have an incredible library. We [...]

  • Taylor Swift

    Taylor Swift Denies Big Machine's Claims Over Song Use, 'Millions' in Debt

    In the latest salvo in a rapidly evolving media battle that has evolved over the past 15 hours, Taylor Swift refuted Big Machine Records’ claim that the company did not try to block her from using material from her early albums, which are owned by the label, in forthcoming television specials. Swift had leveled those [...]

More From Our Brands

Access exclusive content