Justice Department signs off on Disney-Fox merger

Justice Department signs off on Disney-Fox merger
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The Justice Department on Wednesday signed off on the Walt Disney Company's proposed merger with much of 21st Century Fox on the condition that the entertainment giant sell off 22 regional sports networks.

Prosecutors said that the condition resolves the concerns they had about competition in the pay-television market.

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“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.”

Combining Fox's regional sports channels with Disney's ESPN would "likely substantially lessen competition" in television markets around the country, a court filing from the department said.

Disney hailed the settlement.

"We are pleased that the DOJ concluded that, with the exception of the proposed acquisition of the Fox Sports Regional Networks, the transaction will not harm competition, and that we were able to resolve the limited potential concerns to position us to move forward with this exciting opportunity that will enable us to create even more compelling consumer experiences," Disney said in a statement.

A Fox spokesman declined to comment.

The announcement is a win for Disney, which had raised its initial bid for Fox's entertainment assets to $71.3 billion earlier this month after Comcast put in a competing offer.

The approval may make it harder for Comcast to win over Fox, which had rejected an earlier bid over concerns about regulatory scrutiny.

Under the proposed consent decree filed in the U.S. District Court for the Southern District of New York Wednesday, the Justice Department will have to approve of the buyer for the regional sports networks.

Updated at 1:01 p.m.