Ex-Comedian Byron Allen Elbows Way Into $9.6 Billion Sports Deal
(Bloomberg) -- Byron Allen, the onetime comedian and TV host who’s building a broad-based entertainment empire, is now one of the backers behind the biggest deal in sports media in years.
Allen is a minority investor in Sinclair Broadcast Group Inc.’s $9.6 billion acquisition of the Fox regional sports networks from Walt Disney Co. -- a deal that catapults the entertainment entrepreneur into the big leagues. He’ll have an interest in 21 channels covering sports from Los Angeles to Miami.
“It’s a huge opportunity,” Allen, 58, said in an interview. The networks were put on the block by Disney after it agreed to buy a big piece of their former owner, Rupert Murdoch’s 21 Century Fox Inc. “I’m a huge fan of Rupert Murdoch,” Allen said, “and this is some of his best work.”
The acquisition, announced Friday, is one of a series of bets Allen has placed recently. Last year, the Los Angeles-based businessman, who started his company 26 years ago on his kitchen table, paid $300 million to buy the Weather Channel.
Allen said he’s known Sinclair Chairman David Smith for three decades, helping lay the groundwork for the partnership. He even sold Smith his first syndicated show, “Entertainers with Byron Allen,” when Sinclair had just two stations.
Allen has continued to provide Sinclair with his syndicated programs, including “Funny You Should Ask,” a comedy game show now airing. Allen said he pressed Sinclair to let him be an investor.
“I decided we weren’t going to sit this out -- we definitely wanted to be a part of it,” he said. “We campaigned, and we were able to strike a deal with Sinclair.”
As part of the agreement, Allen will provide content to the sports networks. He declined to say how much he’s investing in the project.
The U.S. Justice Department required Disney to sell the properties to win approval for its $71 billion acquisition of Fox’s entertainment assets. The regulators said that Disney, which also owns ESPN, would have had too much control over sports media otherwise.
“These are very valuable assets, and they are hard to come by,” Allen said. “No one would sell them if they didn’t have to. And this is a situation where they had to.”
Still, several potential suitors bowed out of the race to buy the networks, which some industry watchers see as vulnerable to cord cutting. The channels, such as Fox Sports Detroit and Prime Ticket in Los Angeles, command some of the highest subscriber fees in the typical cable TV bill. So subscribers may eventually balk at paying for them.
Allen said the sports-programming rights Fox has amassed will always find a home, no matter how they are ultimately distributed.
“Live sports is the one thing that people value and they’re going to want always, and this is one of the greatest collections of live sports -- period,” he said. “How they consume it, that’s a different conversation. But there’s no scenario that consumers, fans, don’t want it.”
©2019 Bloomberg L.P.