The Justice Department on Wednesday allowed Walt Disney to a merger with 21st Century Fox on the condition that the entertainment giant sells off 22 regional sports networks.
Prosecutors said that the condition resolves the concerns they had about competition in the pay-TV market.
“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, the head of the Justice Department’s antitrust division, said in a statement. “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.”
According to Reuters, the Fox-Disney deal still needs numerous other regulatory approvals from other countries.
Fox and Disney decided to go ahead with their deal, which Fox chose over a competing $65 billion bid from cable operator Comcast Corp earlier this month.
Disney last week in a regulatory filing stated that it was willing to divest Fox assets that generated up to $1 billion in earnings before interest, tax, depreciation, and amortization (EBITDA) to get a regulatory nod for the deal.
The media conglomerate previously was planning to divest Fox assets that generated only $500 million in EBITDA.
Both Disney and Comcast are interested in Fox’s TV shows and movie franchises such as the “X-Men” superheroes as well as “The Simpsons.”
The interest is fueled by the fear of being overrun by the fast-growing digital rivals Netflix Inc and Amazon, Inc.
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