Amazon joins bidding for Disney sports channels
Under the terms of its $71 billion acquisition of 21st Century Fox assets, the Walt Disney Co. has to divest a number of its sports channels. This week, Ecommerce titan Amazon added its name to the growing list of companies that want to pick those channels up. For Amazon, they represent a sure-fire way to aggressively expand the live sports offering on its Amazon Video service. The company has already exclusively streamed some sporting events this year – and it’s made no secret of wanting to develop further in that area.
Despite tech backlashes and trade wars weighing on the market, Amazon’s share price is still up by 31% so far this year
Source: Yahoo Finance
For Amazon, live sport offers a powerful addition to its roster of viewing options. Sport is phenomenally popular worldwide, and its an area where Amazon Video’s most notable competitors (other streaming video on demand [SVOD] players like Netflix and Hulu) are notably absent. Earlier this year, the company streamed UK coverage of the US Open tennis tournament. Prior to that it bought exclusive streaming rights in the UK to some football (or soccer) matches. It’s also planning to show live English Premier League football (soccer) late next year.
There are 22 regional sports networks on offer, and Amazon wants to buy them all. A number of bidders are in the running for some-or-all of these networks, including Apollo Global Management, KKR & Co., Blackstone Group LP, Sinclair Broadcast Group Inc., and Tenga Inc. But, if Amazon really wants this stuff, it shouldn’t have difficulty winning the bidding war.
According to Bloomberg analyst Robert Schiffman, financing the whole package of Disney sports networks would cost about $20 billion. In a note, he wrote: “With ample borrowing capacity and cash on hand, Amazon’s ability to outpay other competitors for these assets should be easily attainable.”
Dominion holds Amazon in its Global Trends Ecommerce Fund.
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