AT&T considers selling regional sports networks to slash debt
AT&T Inc. is weighing a sale of its regional sports networks as part of a plan to cut as much as $8 billion in debt by the end of the year, according to people familiar with the matter.
The four regional networks, which include rights to teams such as hockey’s Pittsburgh Penguins, basketball’s Houston Rockets and baseball’s Seattle Mariners, could fetch close to $1 billion, according to the people, who asked not to be identified as the deliberations are private.
Sinclair Broadcast Group Inc., which agreed in May to buy 21 Fox regional sports networks from Walt Disney Co. for $9.6 billion, could be among the potential buyers, the people said. John Malone’s Liberty Media Corp. and Ice Cube’s Big3 U.S. basketball league were among the other bidders for the Fox assets.
AT&T hasn’t started a formal process to sell the networks, and there are no guarantees a deal will be announced, the people said. The four networks are AT&T SportsNet Pittsburgh, AT&T SportsNet Rocky Mountain (Utah, Nevada and Colorado), AT&T SportsNet Southwest (parts of Texas and Louisiana) and Root Sports Northwest (Alaska, Washington and Oregon). The four networks have rights to more than two dozen pro teams, college programs and NCAA conferences.
A representative for AT&T declined to comment, while Sinclair didn’t respond to requests for comment.
A sale of the regional sports networks — known as must-see content for avid fans — highlights AT&T’s ongoing struggle to fix a debt-heavy balance sheet. The company, which has to spend money on a number of priorities, including an expansion of its 5G wireless network, has been financially handcuffed after amassing more than $180 billion in debt with the acquisitions of DirecTV and Time Warner Inc.
Despite a steady decline in TV subscribers, AT&T Chief Executive Officer Randall Stephenson has said the company’s top priority this year is to reduce debt. As part of that plan, he has been raising cash by selling holdings, including its stake in Hulu and its New York offices. The two deals fetched $3.6 billion in proceeds.
The sale would make sense for AT&T because the teams and the conferences in the regional networks have been seeking richer terms, knowing live sports attracts viewers. AT&T might see the sale as a way to “get rid of the high costs and use the cash to buy down more debt,” said Roger Entner, an analyst with Recon Analytics.
Sinclair’s purchase of the Fox networks from Disney is still subject to approval from the Justice Department and the Federal Communications Commission. Last week, three senators and presidential hopefuls — Cory Booker, Bernie Sanders and Elizabeth Warren — wrote a letter to the FCC and Justice Department expressing their concern over the increased costs to cable and satellite consumers.
