The Department of Justice approved the Walt Disney Company’s $71 billion bid for the entertainment assets of 21st Century Fox on Wednesday, potentially complicating Comcast’s desire to make a rival offer for Rupert Murdoch’s entertainment empire.
The government’s approval was filed in federal court on the condition that Disney, which already owns ESPN, divest all of Fox’s 22 regional sports networks, which include valuable channels like the Yankees’ YES network.
“Today’s settlement will ensure that sports programming competition is preserved in the local markets where Disney and Fox compete for cable and satellite distribution,” Makan Delrahim, the head the Justice Department’s antitrust division, said in a statement.
In December, Disney and Fox agreed to an all-stock deal worth $52.4 billion. Then, two weeks ago, Comcast made an offer for the Fox assets that was worth about $65 billion. That prompted Disney to come back with its richer offer, which is a mix of cash and stock.
At stake are cable channels including FX and National Geographic, the “Avatar” and “X-Men” film franchises, and a pair of international television networks: the European pay-TV operator Sky and Star India. Those two networks, which are growing businesses with an emphasis on streaming services, are key attractions for both Disney and Comcast.
Not included in the sale are Fox News, the Fox broadcasting stations and the FS1 sports network.
The regional sports networks are one of Fox’s most valuable businesses and are expected to generate more than $2 billion in profit this year. Adding those channels to Disney’s portfolio could be seen as stifling competition since Disney also controls ESPN, the dominant cable sports channel in the United States. The sports networks could also be problematic for Comcast, which already controls nine regional sports networks.
The Justice Department approved the Disney deal just six months after the merger was announced. Transactions of this size typically take a year or longer. The relatively quick process contrasts markedly with AT&T’s $85.4 billion purchase of Time Warner, which took almost two years to close. The Justice Department had sued to block that deal but lost the case this month after it failed to convince a federal judge that combining the companies would lead to higher cable bills.
As a candidate, Donald J. Trump, who had frequently blasted CNN, a Time Warner property, as “fake news,” vowed to stop the AT&T-Time Warner merger if elected to the White House.
“We will not approve in my administration because it’s too much concentration of power in the hands of too few,” he said at the time.
He exhibited more rosy feelings for the deal between Disney and Fox. “I know that the president spoke with Rupert Murdoch earlier today, congratulated him on the deal,” the White House press secretary, Sarah Huckabee Sanders, said in December.
Disney said in a statement on Wednesday it was “pleased that the D.O.J. concluded that, with the exception of the proposed acquisition of the Fox Sports Regional Networks, the transaction will not harm competition.” The company added that it saw the deal as an “exciting opportunity that will enable us to create even more compelling consumer experiences.”
The approval bolsters Disney’s bid, which is about $6 billion more than Comcast’s current offer for Fox. Disney’s chief executive, Robert A. Iger, is counting on the merger to cement his legacy. He had flirted with a presidential run in 2020 but decided to continue leading the company after efforts to plan his succession resulted in the departures of two senior executives.
Comcast’s chief executive, Brian L. Roberts, also wants to reach an agreement for Fox’s business, but the cable giant has remained quiet since Disney made its latest offer. Comcast declined to comment on Wednesday.
Comcast has been talking to private equity investors and other media companies about teaming up on a renewed offer for the Fox assets, The Wall Street Journal reported Wednesday.
