Last week, Disney CEO Bob Iger spoke on CNBC in a lengthy interview following his contract extension until 2026. During the interview, he was asked about many topics, including the future of Hulu and linear television, but one of the biggest news coming out of the interview, was that Bob Iger wasn’t looking to sell ESPN, but was looking for some new strategic partners that could either help them with distribution or content. Bob even said that he’s had some conversations with some potential partners, but didn’t want to elaborate.
Following this news, that Disney was looking to sell off part of ESPN potentially, speculation over who Bob Iger was talking to about bringing into ESPN has been rampant. Currently, Disney owns 80% of ESPN, while Hearst owns the other 20%. With customers leaving legacy linear platforms like Cable in huge numbers, Disney is looking to pivot to streaming even more, following where consumers have been going. Disney is planning on launching a full ESPN direct-to-consumer platform in the years ahead, and bringing in a new partner might be a major benefit to doing so.
Disney is still suffering from the impact of purchasing 20th Century Fox just before the pandemic hit and with Disney looking to spend billions of dollars buying out Comcast’s stake in Hulu within the next year, selling a portion of ESPN might be the quickest way of balancing the books.
CNBC has reported that Bob Iger and ESPN head Jimmy Pitaro have held early talks with some of the biggest sports leagues in the US, including the National Football League, National Basketball Association and Major League Baseball, as investors in ESPN.
These early discussions with the NFL, NBA and MLB were apparently about a variety of new partnerships and investment structures,
An NBA spokesperson confirmed in a statement about the discussion. However, ESPN, the NFL and MLB declined to give a comment to CNBC about the discussions.
“We have a longstanding relationship with Disney and look forward to continuing the discussions around the future of our partnership.”
The NFL has been interested in having more of a stake in its media assets, such as the NFL Network and the NBA are currently under contract with ESPN and Warner Brothers Discovery until next year, so preparations are underway for negotiations over a new deal.
Disney has previously worked with the MLB and NHL, who used to own a stake in BamTech, which was later rebranded to Disney Streaming. BamTech was behind the creation of the MLB and NHL’s streaming platforms, in addition to launching the WWE Network and running Hulu.
While there might be advantages for ESPN to be jointly owned by the major sports leagues, there are potential issues that would have to be addressed and could also cause a conflict of interest, especially with regard to the news division at ESPN.
And from the league’s point of view, becoming a part of ESPN could cause problems with them signing other media rights deals with other partners like FOX, Apple, Paramount, Amazon or Comcast. Currently, sports leagues are able to let the studios outbid one another for the right to show their content, so becoming a co-owner of ESPN might not be financially beneficial to them.
Earlier this year, it was reported that Disney was looking to make ESPN a sporting hub, which would allow ESPN app users the ability to watch a game on what every streaming platform or channel is broadcasting. And with sporting rights becoming more expensive, this would be a way of potentially taking a cut of new subscribers, similar to how Amazon, Apple and Roku offer streaming services through their platforms.
With the talks still in the early stages, it might be a while until we hear if Disney has been able to secure any strategic partners for ESPN. But at the same time, technology and customer habits are changing fast, which means ESPN needs to continue to adapt and evolve.
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Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom.