Soccer TV: what the green light from the Government implies for the ESPN – Fox Sports merger (and the entry of MediaPro)

in the papers, The national government has just accepted the merger between ESPN and Fox Sports, which had objected through a resolution on January 17. The definition of the Internal Trade Secretariat has not yet been published in the Official Gazette, but it has been communicated to the interested parties. The impact on the TV sports industry is immediate: MediaPro enters, a company created in Barcelona and that will invest close to US$ 30 million to be able to broadcast the events that Fox Sports had and that the competition regulator forced ESPN to give in. Among them are the Copa Libertadores, the Champions League and Formula 1.

The official decision, which bears the signature of Robert FelettiSecretary of Domestic Trade, and which is based on a ruling by the National Commission for the Defense of Competition after analyzing the divestment plan proposed by The Walt Disney Company (controlling both Fox Sports like ESPN in Argentina), has an immediate consequence: Boca and River matches will continue in premium football and you will have to pay to see them, as before. The subscription costs $1120 per month.

The precautionary measures launched by the government in January, when it objected to the original divestment plan presented by the Mickey Mouse company, will not run either. Among them was the “transmit in an open and free way the relevant sporting events of each of the competitions defined as fundamental contents”. In addition to the Champions League and the Copa Libertadores, on that list were also the American football NFL, the MLB baseball, the UFC and the WWE, the ACB basketball league, the ATP 250 of Córdoba tennis and the Copa del Rugby Sevens World. All that will now be in the hands of MediaPro.

A scene from the last River-Boca, in the MonumentalMauro Alfieri – THE NATION

With the approval of the divestment plan presented by Disney and the entry of MediaPro, all these measures come to nothing. And the Spanish company MediaPro goes on to control Fox Sports, which will allow it to broadcast all those events. It is planned that the formal launch is in the match between the selected Italy and Argentinathe “Finalsima” at Wembley (England) between the Euro 2020 champion and the current South American monarch. The meeting will be held on June 1 and tickets are practically sold out, a sign of the interest that the event aroused.

“To avoid the concentration of a dominant position in the market for sports signals, the CNDC required the transfer of certain relevant assets to a new competitor (MediaPro, in this case)”, says a press release released by the regulatory body, chaired by the lawyer Rodrigo Luchinsky. “The deconcentration and the commitments imposed by the CNDC benefit more than 8 million households that are subscribed to the pay television service in Argentina. The CNDC continues to defend market competition, and thus protects the general economic interest and the well-being of consumers,” the document continues. The CNDC clarifies that “it will monitor compliance with the behavioral commitments established on Disney in the marketing of signals in Argentina.” That audit will last for the next five years.

Near the American company welcomed the government’s decision, which puts an end to an economic concentration operation (such is the technical name of the Fox-ESPN merger) that began in March 2019! That is, a procedure that took more than three years. “They managed to bring everything to fruition and they are happy. 80-90 percent of the objectives they had were met, ”says a person close to the negotiations between the company and official officials, who had multiple meetings and interlocutors, since in the course of the process there was, in addition to a pandemic, a change of government.

Roberto Feletti, secretary of internal trade, signed the resolution that endorses the Disney divestment plan and gives the green light for MediaPro to enter the television broadcasting business
Roberto Feletti, secretary of internal trade, signed the resolution that endorses the Disney divestment plan and gives the green light for MediaPro to enter the television broadcasting businessHernan Zenteno

“The final resolution was the least damaging and Disney kept the business of streaming and Argentine soccer,” adds the informant, who emphasizes that the contracts signed by the American entertainment giant with both the owners of television rights (Liberty Media in the case of F1; UEFA for the Champions League, among others) remain in force. In other words: the contracts are maintained, but Disney assigns the rights and obligations to MediaPro, which is the one who will pay the owners of the rights from now on. The same goes for carrierswhich are the ones that distribute the signal and take it to homes, final consumers of live sporting events: Personal-Cablevisión, DirecTV or TeleCentro, to name a few.

Near the CNDC they also celebrated the end point after three years of comings and goings with Disney. “The CNDC ends up accepting the divestment and the entry of MediaPro. They can consider it a great success, since they found a problem in a market (that of sports transmissions), they proposed a structural solution, Disney accepted it and a strong competitor entered, as they wanted, in that business, ”contributes another knowledgeable about the industry and regulatory body meetings. “On top of that, MediaPro is a company with a long history and will surely make a significant investment in the country,” adds the source.

What is MediaPro?

In Argentina, MediaPro is a content producer. As such, it provides the “irons” (technical equipment) and journalistic facilities for different sports broadcasts that its clients buy from them. Disney, among them. In addition, the Spanish company has the “production hub” for the Copa Libertadores matches. That is to say, they are in charge of everything relevant to the screen of the matches of the main tournament of South American teams. His client, in this case, is the South American Football Confederation (Conmebol), which also pays him for the VAR service in matches.

The Catalan Jaume Roures, strong man of MediaPro, the new player in the TV sports business
The Catalan Jaume Roures, strong man of MediaPro, the new player in the TV sports businessReuters

In recent weeks, the negotiations between the CNDC and Disney have focused on the details of MediaPro and the contracts presented by Disney, which will remain valid. Regulators found no incompatibilities or corporate links between the companies, one based in the United States (Disney) and the other in Spain. That released the entry of the new competitor. At the MediaPro headquarters, however, they had already toasted in January. Despite the fact that the Government had objected to the merger between ESPN and Fox, in the Argentine affiliate they understood that the process would end with a happy ending. It was what happened now.