Brazil approves Disney-Fox merger

The Brazilian Economic Defense Administrative Council (CADE) today approved the acquisition of Twenty-First Century Fox by The Walt Disney Company. The transaction was made by running a Concentration Control Agreement (ACC). The approval was granted without the requirement to sell Fox Sports in the country.

In late 2019, taking into account that there were no buyer for Fox Sports operations in Brazil, CADE submitted its position to a new review. In his vote, news adviser Luis Henrique Bertolino Braido noted that at this stage of the merger review, Disney again attempted to sell Fox Sports. However, despite the efforts and taking the current economic situation due to the Coronavirus pandemic into consideration, it was not possible to proceed with the sale of the business. For this reason, behavioral measures were negotiated with Disney that mitigate the competition problems and seek to guarantee the diversity of sports programming in Brazil.

To achieve the authorization, Disney committed itself to CADE to keep all sports events distributed in Brazil on its grid for the next three years, or until the term established in their respective agreements ends. It also promised to keep the main Fox Sports channel with the same existing quality standard, including the Copa Libertadores matches broadcasts until January 1st, 2022. ‘After that date, the competition’s matches must be aired on one of its affiliated channels, until the end of its current agreement with Conmebol’, reported CADE.

In addition, the agreement establishes that Disney must return the Fox Sports brand in advance if it decides to end the channel broadcasts, leaving it free to be used by any other group that is interested, through a commercial agreement with its owner.

The sale of Fox Sports in Brazil and Mexico was one of the requirements imposed by CADE and IFT (Telecommunications Federal Institute) regulators, when they authorized the operation, with the aim of avoiding the concentration of sports channels in the market, since Disney also owns ESPN. In Mexico, the IFT reported that, taking the Coronavirus situation into account, the disengagement period was suspended. According to the IFT, it will be resumed on June 20th and will end next August 3rd.