Disney must sell Fox Sports within 6 months of merger - Mexican regulator

Disney will have to sell its Fox Sports TV channels within six months of its US$71bn merger with 21st Century Fox, with an additional six-month grace period for "justifiable" causes, the chief of Mexico's telecoms regulator said.

IFT president Gabriel Contreras (pictured) said in an interview with radio show Formula Financiera that if the company does not comply with that deadline, the assets will be put into a trust with the mandate to sell it. That trust will then have another year to carry out the sale.

The IFT authorized the global deal this week, following the lead of Brazil's Cade antitrust authority, but it added the condition that Disney, owner of the popular ESPN brand of sports TV channels, sold the Fox Sports channels, seen as its main competitors.

"If you look at any pay-TV package, the sports content is basically the ESPN and Fox Sports channels. There are others, but the concentration [between the two] reaches levels close to 80%," Contreras said.

The IFT, which regulates both technical and economic competition aspects of telecommunications and broadcast markets in the country, will also have to give the thumbs-up to any would-be buyers of the Fox Sports channels to guarantee that the acquisition does not cause risks to competition in the sector.

The regulator also set conditions for the merged companies' documentary and cultural and reality channels, such as National Geographic (Fox) and the History Channel (Disney). The combined offerings of the two companies in that segment reaches over 40% of the market and after the merger suppliers of that type of content will be limited to just two, he added.

The conditions for that sector of the business include the Fox and Disney offerings having to keep distribution and commercialization separate, Contreras said. The companies are expected to formalize the merger on March 20.