ESPN and the NFL are in advanced talks about the league getting an equity stake in the network, according to Andrew Marchand of the New York Post.
How Close Is a Deal?
The New York Post report says that ESPN would take over NFL Media if a deal is completed. The NFL Network, NFL.com, Red Zone, NFL Films, and NFL+ are all under the NFL Media division.
In July, Disney CEO Bob Iger said in an interview with CNBC that the company would be looking for strategic partners.
Since Iger’s comments, there have been reports that Disney has had discussions with the NFL, NBA, MLB, Amazon, and Verizon about possible equity deals. Disney owns 80% of ESPN, with Hearst Communications owning the other 20%.
The NFL has been open to selling NFL Media in the past. Commissioner Roger Goodell told the Sports Business Journal in December 2021 that the league was open to selling part of NFL Media. There are no details at this time on how much ownership the NFL will retain.
According to the report, the NFL owners and players have been informed of the talks because the collective bargaining agreement requires them to share money from the equity deal. Even though the talks have reached an advanced stage, they could still take months to complete.
In 2021, Disney agreed to a long-term deal with the NFL, paying the NFL $2.7 billion annually to show 25 games a season on ESPN and ABC. The deal, which runs until 2033, also includes the rights to broadcast the Super Bowl following the 2026 and 2030 seasons on ESPN and ABC. Along with a Wild Card game, ESPN will have a Divisional Round game each season under the new agreement.
Why Would ESPN Sell Equity?
Over the last several years, ESPN has lost millions of subscribers to their cable service. The network had around 100 million subscribers in 2011, but now they are down to just over 70 million. This is a large part of ESPN’s revenue because the network gets paid over nine dollars a month for each cable subscriber.
The network has over 25 million subscribers to its streaming service, ESPN+. Disney is expected to launch a standalone ESPN streaming service that would allow people to watch ESPN without cable by 2025.
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In August, Iger said on a company earnings call, “We’re not necessarily looking for a cash infusion when it comes to potential partners. We are looking for partners that are going to help ESPN transition to a DTC (direct-to-consumer) model. That can come in the form of content, or distribution and marketing support, or both.”
The two biggest rights deal negotiations for ESPN in the near future are the NBA, which expires after next season, and the College Football Playoff agreement, which ends after two more seasons.
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