Disney is reportedly considering bringing professional sports leagues on as minority investors in ESPN, according to sources familiar with the matter. CEO Bob Iger and ESPN head Jimmy Pitaro have held early talks with the National Football League (NFL) and the National Basketball Association (NBA) about potential partnerships and investment structures. The NFL is also seeking a company to take a stake in its media assets, such as the NFL Network and NFL.com. The NBA and Disney have discussed various structures for a renewal of their media rights agreement.
Iger has stated that Disney is looking for a strategic partner for ESPN as it transitions the sports network to streaming. He mentioned that a partner could bring additional value through distribution or content. Disney currently owns 80% of ESPN, with Hearst owning the remaining 20%.
A jointly owned subscription streaming service among multiple leagues could offer consumers new packages of games and innovative ways to consume content. This move would be beneficial for Disney as it tries to move away from the traditional cable subscriber model. However, it may pose conflicts of interest for the leagues if they take a stake in ESPN, potentially irking Disney's competitors who bid for sports rights.
There are also hurdles for Disney, as ESPN employs journalists who cover the major sports leagues. Selling an ownership stake to the leagues could raise questions about objectivity in ESPN's reporting.
ESPN aims to transform itself into a streaming hub for all live sports. Management plans to launch a feature that allows users to access games through ESPN.com or the ESPN app, regardless of the streaming platform. Disney is actively seeking ways to prepare for a streaming-dominated world that includes its full portfolio of sports rights.
In conclusion, while Disney's discussions with professional sports leagues about minority investments in ESPN could provide benefits such as steady content flow and potential cost mitigation, there are challenges to address, including conflicts of interest and maintaining journalistic integrity. However, Disney is determined to position ESPN as a streaming-first entity in order to adapt to the changing media landscape.