isney ESPN has reportedly involved three of the biggest entities in all of sports as investors.
Disney is looking for investors in ESPN. Disney could tap NFL, NBA, and MLB as potential investor in ESPN. It engages in preliminary talks with major sport leagues to possibly explore strategic equity partnership. With the major sports league as Disney’s equity partner, this would bring ESPN closer to key leagues. Talks follow Iger’s stated openness to bringing in investment partners.
Executive leadership at ESPN and its parent company Disney have engaged in preliminary discussions about the possibility of a deal that would bring major American professional sports leagues on as minority investors, according to a report from CNBC.
Disney investors
Disney wants to transition ESPN from linear TV to streaming and the NBA and NFL might be the equity partners that help the company do that. A CNBC report says that Disney officials, including CEO Bob Iger and ESPN chairman Jimmy Pitaro, have held initial talks with the NFL, NBA, and MLB as part of a larger concept: bringing pro sports leagues in as minority investors in the iconic sports network.
Disney ESPN investors
Sources tell CNBC that ESPN spoke with the NFL and NBA about a “variety of new partnerships and investment structures” that could involve either sports league owning a stake in ESPN, which could help bolster the package of exclusive content on Disney’s vision of a streaming only version of ESPN.
In an interview with CNBC last week, Iger hinted at selling some of Disney’s linear TV assets like ABC but noted sports content on ESPN still “stands very, very tall” with the ability to reach millions of people. However, when asked about bringing Disney’s ESPN to streaming, Iger mentioned having “strategic partners” that could help complete that shift away from cable.
“We’re going to be open-minded about looking for strategic partners that could either help us with distribution or content, I’m not gonna get too detailed about it, but we’re bullish about sports in general as a media property”, Iger said.
The move closely follows Iger’s disclosure that Disney is open to selling part of ESPN to an equity partner, as the company is, in his words, “dealing head-on with some of our biggest challenges”. One of the challenges making Disney look for investors and cord-cutting is ESPN’s linear reach has slashed from more than 100 million homes in 2011 to the present 72.5 million.
ESPN partnerships
Such a move would bring ESPN even closer to three of its most important pro sports properties. In 2021, the network extended its NFL rights through 2033 in a deal worth about $2.7 billion per year providing additional game inventory and broad highlight rights to help power extensive amounts of daytime ESPN programming.
The NBA, meanwhile, has been on ESPN continuously since 2002, and the network’s current rights expire in 2025. Even without an equity deal, ESPN has been very interested in extending those rights. ESPN similarly extended its MLB deal in 2021 through 2028.
“We have a longstanding relationship with Disney and look forward to continuing the discussion around the future of our partnership,” the NBA said.
Effect of sports league as Disney’s equity partner
If the sports leagues decide to take a stake in ESPN, CNBC points out that this could ruffle the feathers of some of Disney’s rivals, such as NBCUniversal and Fox, as it may result in the teams working more closely with ESPN rather than other networks. It might mean less money for the NFL and NBA, too, which often strike lucrative deals with several media partners during the season.
