The wonderful empire of Disney (DIS) has shown no indication that it will be slowing down any time soon. The company reached an agreement last December to buy the majority of 21st Century Fox’s (FOX) TV and film assets in a $71.3 billion transaction. In the months following the deal, the US Justice Department filed a complaint in federal court to block Disney’s (DIS) deal with Fox (FOX) because of the concern that Disney’s (DIS) ownership of ESPN, with the addition of the 22 regional sports networks absorbed in the new deal, would give Mickey Mouse a monopoly on distribution of sports media. 

“American consumers have benefitted from head-to-head competition between Disney and Fox’s cable sports programming that ultimately has prevented cable television subscription prices from rising even higher.”

Makan Delrahim, Assistant Attorney General and Head of DOJ Antitrust Division

There was no possible scenario which saw Disney (DIS) abandoning the Fox deal so, naturally, the company agreed to sell off  21st Century Fox’s (FOX) 22 regional sports networks back in June. Since the company announced the decision to give Fox’s sports empire to the highest bidder, the market has waited, anticipating which company would step up to the plate. 

Let’s try and guess which company is currently winning the bidding war for the 22 regional sports TV networks. Which company currently has more capital than they know what to do with, and has a successful media streaming company of their own that would greatly benefit from being able to give their members access to sports entrainment? If you guessed Netflix (NFLX), you’re wrong, I award you no points, and I am sorry I ever believed in you. 

Jeff Bezos and his e-commerce startup known as Amazon (AMZN) placed their bid on Tuesday, which, if accepted, would give them access to the aforementioned Fox (FOX) sports networks, including the YES Network, which airs Yankees and Brooklyn Nets games, according to a report from CNBC. Sources believe Fox, the previous owner of the regional channels, may submit a bid during the second round, but no official comments have been made supporting this claim. 

Though no amounts of the first round bids have been released, the twenty-two regional sports networks (RSN) are reportedly valued at $22.4 billion, according to an analysis by Guggenheim Securities. 

Blood is in the water surrounding the RSN up for grabs, and interested company sharks are ready to feed, however, analysts in the space are concerned with the prospect of Amazon (AMZN) acquiring sports rights, even a declining business like regional sports. 

If Fox (FOX)  CEO Lachlan Murdoch fails to buy back his company’s sports networks, he may be risking his own survival. Americans mostly consume their media from online resources, rarely moving to turn on the TV, but when they do turn on the tube, it’s to watch live sporting events, many of which are distributed by Fox. 

If Amazon (AMZN) succeeds and claims ownership over 22 regional sports networks, cable companies will undoubtedly see a significant decline in subscribers. Companies like Time Warner and Comcast have already seen millions of subscribers unplug their cable boxes and switch over to streaming sites like Amazon Prime (AMZN) and Netflix (NFLX). What will happen if people no longer need to pay for cable if they can watch the Super Bowl or an NBA game through their Amazon (AMZN) subscription? 

“Sports is the only content that is holdings its [Fox] audience viewership-wise and in turn, supporting the $70 billion TV ad industry.”

Rich Greenfield, Analyst, BTIG 

The bidding war for Fox’s (FOX) coveted regional sports networks is far from over, with second-round bids due before the end of the year, according to CNBC. Whether or not Amazon (AMZN) makes the power play to secure the deal could change the TV industry as we know it. 

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