NFL 10% Stake in Disney's ESPN
The Disney-owned sports media conglomerate ESPN is acquiring control of NFL RedZone, as well as the NFL Network. In exchange, they are receiving up to 10% of ESPN's equity, which is estimated to be worth between $2.5 billion and $3 billion. This merger between two of the biggest names in entertainment and sports further strengthens relationships between media companies and athletic leagues, which are moving beyond traditional streaming rights. The NFL will also have equity in rights holder CBS after Skydance closes its deal to acquire the network’s parent, Paramount Global, this week.
The deal will need regulatory approval, and given the size and power of the NFL and ESPN, it might face some scrutiny from lawmakers. Assuming the partnership gets approved, Disney’s stake in ESPN will drop 8% to 72%, while minority owner Hearst will drop 2% to 18%. Despite this concern, these two have been very close over the past decade. In 2021, the NFL hired Goldman Sachs to explore a strategic partner, but didn’t land on ESPN quite yet.
The NFL hasn’t been able to post a positive performance in its media. Roughly 14 months ago, several NFL Network on-air personalities were let go, canceling NFL Total Access after 20 years of streaming. This partnership will look to turn things around.
In the NFL Network, ESPN will have a 24/7 news channel for the league. It will also host seven exclusive regular-season games. NFL Network currently reaches about 50 million homes. As part of the deal, ESPN will need to license NFL Network’s games from the league. Although much smaller than NFL Network, the NFL’s RedZone has a very loyal audience. The in-season Sunday-only network that carries live action from all the afternoon games is particularly popular among hardcore fans and fantasy football players. The channel is in fewer than 10 million homes, which the league hopes can increase with help from ESPN’s network.
There have been limits to how aggressively the NFL can make RedZone available, as rights holders to Sunday games have expressed concern that the network is a potential threat to their own coverage of games.