Disney's Next Acquisition Speculation / Discussion

[Comped]

Yes, this is old news at this point. This deal between ESPN and NFL Network has been in the works for at least the last 6 months, basically since the end of last season.

It's a disappointing spend for Disney continuing to focus ESPN on NFL games and related product, especially long-term as gridiron football declines in players and youth gridiron football participation continues to decline significantly year over year. The sport will, absent some kind of change, more than likely become a regional product in the next 20 years if that keeps up and more eyes go to other sports. Viewership is showing declines among young people as well.

Seems like a short-term acquisition that may have long-term ramifications. Should be spending the money on sports that will be long-term hits. Oh yeah, they continue to par down their soccer/football rights and most sports outside of college sport and parts of the NFL/NHL/NBA. Even free content from TSN was scrapped in favor of more gridiron coverage... The NBA/NHL deals are somewhat bright spots (especially as Disney controls more of the schedule than the NFL), but don't get near the coverage on ESPN programs that th NFL/NCAA do and will continue to do. Any other sports? Dream on...

 

[Disney Irish]

It's a disappointing spend for Disney continuing to focus ESPN on NFL games and related product, especially long-term as gridiron football declines in players and youth gridiron football participation continues to decline significantly year over year. The sport will, absent some kind of change, more than likely become a regional product in the next 20 years if that keeps up and more eyes go to other sports. Viewership is showing declines among young people as well.

Seems like a short-term acquisition that may have long-term ramifications. Should be spending the money on sports that will be long-term hits. Oh yeah, they continue to par down their soccer/football rights and most sports outside of college sport and parts of the NFL/NHL/NBA. Even free content from TSN was scrapped in favor of more gridiron coverage... The NBA/NHL deals are somewhat bright spots (especially as Disney controls more of the schedule than the NFL), but don't get near the coverage on ESPN programs that th NFL/NCAA do and will continue to do. Any other sports? Dream on...

Not sure if I agree with this assessment on the NFL, especially as just a regional product since its expanding internationally. There have been rumors for awhile now of a few expansion teams being added in the international markets as the sport increases in popularity in those markets. Its why they've expanded the schedule to hold more international games.

So yeah I don't see the NFL declining, just changing. So this is a good deal for both the NFL and for Disney.

As for other sports, well the entire landscape is changing in terms of how viewership happens. From streaming rights to partnerships. So just because they may "par down" their rights in one area they increase them in other areas. Like for example their expanded relationship with F1 or their expanded rights to the UEFA League. So I think your assessment is a bit flawed here.

 

[Sirwalterraleigh]

The Athletic is reporting that NFL Network and RedZone are Disney's next acquisition, perhaps with a small equity stake in ESPN going to the NFL in return.

That was out there a couple weeks ago…I’m surprised it’s gotten little run to this point? Very weird…

 

[Sirwalterraleigh]

It's a disappointing spend for Disney continuing to focus ESPN on NFL games and related product, especially long-term as gridiron football declines in players and youth gridiron football participation continues to decline significantly year over year. The sport will, absent some kind of change, more than likely become a regional product in the next 20 years if that keeps up and more eyes go to other sports. Viewership is showing declines among young people as well.

Seems like a short-term acquisition that may have long-term ramifications. Should be spending the money on sports that will be long-term hits. Oh yeah, they continue to par down their soccer/football rights and most sports outside of college sport and parts of the NFL/NHL/NBA. Even free content from TSN was scrapped in favor of more gridiron coverage... The NBA/NHL deals are somewhat bright spots (especially as Disney controls more of the schedule than the NFL), but don't get near the coverage on ESPN programs that th NFL/NCAA do and will continue to do. Any other sports? Dream on...

It’s 99% about gambling

That’s why they are steering the ship this way.

They want to be there the most money will be lost (by the public)…and that’s where it will be

The will overpay for it now

 

[Disney Irish]

That was out there a couple weeks ago…I’m surprised it’s gotten little run to this point? Very weird…

As I said its not new, these current negotiations have been going on since Super Bowl -

ESPN, NFL resume talks over NFL Media assets

As of last May, rumors were rampant that a deal between the NFL and ESPN for a chunk of the league's media assets was imminent.

www.nbcsports.com

It started last year really, this is just the finalized deal.

 

[Comped]

Not sure if I agree with this assessment on the NFL, especially as just a regional product since its expanding internationally. There have been rumors for awhile now of a few expansion teams being added in the international markets as the sport increases in popularity in those markets. Its why they've expanded the schedule to hold more international games.

So yeah I don't see the NFL declining, just changing. So this is a good deal for both the NFL and for Disney.

As for other sports, well the entire landscape is changing in terms of how viewership happens. From streaming rights to partnerships. So just because they may "par down" their rights in one area they increase them in other areas. Like for example their expanded relationship with F1 or their expanded rights to the UEFA League. So I think your assessment is a bit flawed here.

The NFL is holding games in international markets like the other major American sports leagues - but they don't make up anywhere near the viewership that the domestic market does. A shrinking domestic fanbase that Disney is now spending billions to retain. At least when Disney has major US sport league content internationally, the cost to acquire is cheap by comparison (ESPN/D+ broadcasts all NFL games in South America (outside Argentina) and most of Africa, plus a portion in Mexico, the Caribbean, and Oceania). The NFL domestically, where it has no real competition for much of the year, is on a downward slope demographically in terms of interest. Less kids playing the game, less in Gen-Z and later watching it, there's no question American football is less popular than it was a decade or two ago before CTE, gaming (wrongfully), and oversaturation, among other things, became a turn off for people which led them to watch it less.

Nearly 80% of teams have declined in local ratings in the past few years, including bankable major franchises. Upwards of 30 or 40% in some cases! You can claim the landscape is not declining, but locally, where most of the viewership is (Sunday Ticket and RedZone are relatively small percentages of NFL viewership, all things considered), the eyes aren't there. Disney is paying billions for the relative small hope that the national product (and more important, shows about the national product they produce) will continue to increase in viewership despite less people watching their local team. That is not a bet I would argue is viable in 10, 20 years, or more - so Bob is likely taking the short-to-medium term play on this.

Disney is likely to lose their rights to F1 to Apple domestically (they still currently hold rights in Latin America (once again minus Argentina), and the Caribbean), because they didn't want to pay $60 million more than this year. A small amount considering how much F1 is growing in the US, but that's just me. UEFA? No rights domestically (Paramount+/CBS has it), but rights in Latin America (for both men's and women's) and Europe (for women's). ESPN's international rights are almost a completely different company from the stuff they have in the US, much more balanced and much less focused on the NFL and NCAA. Lacks most cricket, but what can you do... Their US rights set is much more concerning going forward, and is my primary issue here. I cannot say enough how good their international rights set is (particularly in Latin America where Disney+/ESPN dominates). But this NFL deal is domestic, since NFL is really a domestic medium, and it stinks.

 

[ᗩLᘿᑕ ֊ᗩζᗩᗰ]

Slow burn play for digital sports betting with an eventual shift into physical spaces i.e. Disney Springs. I give it a decade.
Wonder how long we've got before Starcruiser becomes a legit casino? /s

 

[Disney Irish]

The NFL is holding games in international markets like the other major American sports leagues - but they don't make up anywhere near the viewership that the domestic market does. A shrinking domestic fanbase that Disney is now spending billions to retain. At least when Disney has major US sport league content internationally, the cost to acquire is cheap by comparison (ESPN/D+ broadcasts all NFL games in South America (outside Argentina) and most of Africa, plus a portion in Mexico, the Caribbean, and Oceania). The NFL domestically, where it has no real competition for much of the year, is on a downward slope demographically in terms of interest. Less kids playing the game, less in Gen-Z and later watching it, there's no question American football is less popular than it was a decade or two ago before CTE, gaming (wrongfully), and oversaturation, among other things, became a turn off for people which led them to watch it less.

Nearly 80% of teams have declined in local ratings in the past few years, including bankable major franchises. Upwards of 30 or 40% in some cases! You can claim the landscape is not declining, but locally, where most of the viewership is (Sunday Ticket and RedZone are relatively small percentages of NFL viewership, all things considered), the eyes aren't there. Disney is paying billions for the relative small hope that the national product (and more important, shows about the national product they produce) will continue to increase in viewership despite less people watching their local team. That is not a bet I would argue is viable in 10, 20 years, or more - so Bob is likely taking the short-to-medium term play on this.

Disney is likely to lose their rights to F1 to Apple domestically (they still currently hold rights in Latin America (once again minus Argentina), and the Caribbean), because they didn't want to pay $60 million more than this year. A small amount considering how much F1 is growing in the US, but that's just me. UEFA? No rights domestically (Paramount+/CBS has it), but rights in Latin America (for both men's and women's) and Europe (for women's). ESPN's international rights are almost a completely different company from the stuff they have in the US, much more balanced and much less focused on the NFL and NCAA. Lacks most cricket, but what can you do... Their US rights set is much more concerning going forward, and is my primary issue here. I cannot say enough how good their international rights set is (particularly in Latin America where Disney+/ESPN dominates). But this NFL deal is domestic, since NFL is really a domestic medium, and it stinks.

NFL viewership is declining? In what world are you living? Why are the major streaming platforms like Amazon and Netflix inking deals for NFL broadcasting rights if its a declining market, they wouldn't. I think you're mistaking the decline in local broadcasting, which is due to liner viewership being in decline as people continue to cut the cord, with lack of interest. In fact the opposite is happening, more viewers are now watching the broadcasts on other platforms rather than on the local providers, just like ALL sports. This isn't a decline in interest, its a change in the landscape of HOW viewers are watching sports. The Super Bowl is still the most watch program of the year in the US, and hit a record breaking viewership this year across all its platforms.

So yeah, its not declining.

As for the rest, again I think your assessment here is flawed. I know that some fans don't like Disney's focus on sports, but its a business they have been in for decades now and will continue to be in for what appears to be a long time to come. Time to just accept that its part of their business.

 

[Comped]

As for the rest, again I think your assessment here is flawed. I know that some fans don't like Disney's focus on sports, but its a business they have been in for decades now and will continue to be in for what appears to be a long time to come. Time to just accept that its part of their business.

My primary job at the moment is in sport. It's why I've lauded ESPN's international rights, they cover a far better segment of sport than they do in the US. I'm well aware of why they spend heavily on it, I just disagree that this is the best choice for how to spend that money... Could have bought Premier League rights worldwide outside of the UK for years with this...

 

[Disney Irish]

My primary job at the moment is in sport. It's why I've lauded ESPN's international rights, they cover a far better segment of sport than they do in the US. I'm well aware of why they spend heavily on it, I just disagree that this is the best choice for how to spend that money... Could have bought Premier League rights worldwide outside of the UK for years with this...

If this is your job then you should know that sports viewership is changing, local broadcasts are becoming a thing of the past just like the rest of linear. That streaming, just like for the rest of media content, is how consumers are now watching their sports. Again its why the major streamers are inking deals with the NFL, they wouldn't be doing that if it was a dying brand and losing viewers. So this deal positions to make ESPN+ the premier source for all NFL content moving forward. That is a boon for Disney in the long run.

Also just because this deal takes place doesn't mean they won't go after other streaming rights, they will. It just has to make sense. Like the deal they passed on a couple years ago for the Cricket Leagues. What happened, a couple years later they ended up with a better deal for all of India streaming with the Reliance merger. So they still get the same thing they would have gotten had they not passed up on it, but got more in the process.

 

[DisDude33]

I'm well aware of why they spend heavily on it, I just disagree that this is the best choice for how to spend that money... Could have bought Premier League rights worldwide outside of the UK for years with this...

I’m confused as to what money Disney is actually spending on this deal? As I understand it NFL is getting a 10% stake in ESPN and unloading its media assets to them. I’ve yet to find the details of the financial side of the deal so there is certainly a lot I’m unaware atm but seems like the NFL would be the ones doing the spending in this situation wouldn’t they?

 

[DCBaker]

Here's the press release on the NFL Network acquisition:

ESPN, a subsidiary of The Walt Disney Company, and the National Football League (NFL) today announced a non-binding agreement under which ESPN will acquire NFL Network and certain other media assets owned and controlled by the NFL — including NFL’s linear RedZone Channel, and NFL Fantasy — in exchange for a 10% equity stake in ESPN. In addition to the sale of NFL Network, the NFL and ESPN are also entering into a second non-binding agreement, under which the NFL will license to ESPN certain NFL content and other intellectual property to be used by NFL Network and other assets.

These transactions between America’s most popular sporting league and the world’s most innovative sports media leader are designed to set a new standard for how professional football is delivered, experienced and celebrated by fans.

“Today’s announcement paves the way for the world’s leading sports media brand and America’s most popular sport to deliver an even more compelling experience for NFL fans, in a way that only ESPN and Disney can,” said Robert A. Iger, Chief Executive Officer of The Walt Disney Company. “Commissioner Goodell and the NFL have built outstanding media assets, and these transactions will add to consumer choice, provide viewers with even greater convenience and quality, and expand the breadth and value proposition of Disney’s streaming ecosystem.”

“Since its launch in 2003, NFL Network has provided millions of fans unprecedented access to the sport they love,” said NFL Commissioner Roger Goodell. “Whether it was debuting Thursday Night Football, televising the Combine, or telling incredible football stories through original shows and breaking news, NFL Network has delivered. The Network’s sale to ESPN will build on this remarkable legacy, providing more NFL football for more fans in new and innovative ways.”

“This is an exciting day for sports fans,” said Jimmy Pitaro, Chairman of ESPN. “By combining these NFL media assets with ESPN’s reach and innovation, we’re creating a premier destination for football fans. Together, ESPN and the NFL are redefining how fans engage with the game—anytime, anywhere. This deal helps fuel ESPN’s digital future, laying the foundation for an even more robust offering as we prepare to launch our new direct-to-consumer service.”

Additional Details

This new relationship brings together some of the NFL’s premier media brands and fan-engagement platforms with ESPN’s deep experience in producing and distributing high-quality and innovative sports programming. ESPN intends to deploy its resources and expertise in the development of NFL Network, distribution of the RedZone Channel and fantasy, to expand audience reach, increase accessibility and flexibility for consumers, drive innovation, and offer even more high-quality content to fans at highly competitive prices. As a result of this sale, NFL programming will be available on more platforms than ever before, including ESPN’s upcoming direct-to-consumer (“DTC”) service, while remaining on cable, satellite and leading streaming providers. ESPN’s DTC offering will deliver an array of NFL content to subscribers.

Under the terms of these agreements:

• NFL Network, including both linear and digital rights, would be owned and operated by ESPN and fully integrated into ESPN DTC, alongside traditional pay television distribution, increasing accessibility and flexibility for consumers and promoting innovation in sports programming.
• ESPN would own broad rights to the RedZone brand and distribute the NFL RedZone Channel to pay TV operators for continued inclusion into their sports packages.
• NFL Fantasy Football would merge with ESPN Fantasy Football, creating the official Fantasy season-long game of the NFL and one best-in-class digital experience, driving innovation and enabling broader reach to meet global demand.
• In total, ESPN’s platforms will license an additional three NFL games per season to air on NFL Network as a result of today’s news. In addition, ESPN will adjust its overall NFL game schedule, with four games (including some from overlapping windows) shifting to the NFL Network, which will continue to present seven games per season.
• The NFL will continue to own and operate its retained media businesses including properties such as NFL Films and key fan-facing platforms such as NFL+, NFL.com, the NFL Podcast Network, the NFL FAST Channel and the official sites for the league’s 32 clubs. It will also continue to own, operate, and produce NFL RedZone, and retain the rights to distribute NFL RedZone digitally.

The transactions are subject to the parties’ negotiation of definitive agreements, various approvals including by the NFL team owners, and customary closing conditions.

ESPN is 80 percent owned by ABC, Inc. (an indirect subsidiary of The Walt Disney Company) and 20 percent by Hearst.

ESPN & the NFL Reach Expansive Agreement | The Walt Disney Company

ESPN will acquire NFL Network and other media assets from the NFL in exchange for a 10% equity stake in ESPN.

thewaltdisneycompany.com

 

[Johnwdwguy]

I'm tired of Disney buying everything we don't need anymore Acquisitions...

 

[Sirwalterraleigh]

I’m confused as to what money Disney is actually spending on this deal? As I understand it NFL is getting a 10% stake in ESPN and unloading its media assets to them. I’ve yet to find the details of the financial side of the deal so there is certainly a lot I’m unaware atm but seems like the NFL would be the ones doing the spending in this situation wouldn’t they?

The nfl is getting some cash…but that’s not why they’re doing this.

It’s to dump the overhead and get a piece of the action…old white men that own football teams love that

 

[Comped]

I wonder if that 10% is coming straight out of Disney's part or being split between then and Hearst?

 

[Disney Irish]

I wonder if that 10% is coming straight out of Disney's part or being split between then and Hearst?

It depends on how the agreement is setup with Hearst, but I suspect it'll be the same as in most cases where it comes out of the majority shareholders stake, so in this case Disney's. So NFL becomes a 10% stakeholder, Hearst with its 20%, and Disney with the remaining 70%.

 

[BlindChow]

Also just because this deal takes place doesn't mean they won't go after other streaming rights, they will. It just has to make sense. ...

ESPN also seems uninterested in renewing the F1 contract, despite the sport's clear surge in popularity both in the US and worldwide.

I agree the other poster's implication that NFL is waning in popularity is absurd. The NFL has been setting new records for viewership every year, and the most recent round of broadcast/streaming deals are the largest ever. This is probably one of the safest decisions ESPN has made recently.

 

[MisterPenguin]

ESPN also seems uninterested in renewing the F1 contract, despite the sport's clear surge in popularity both in the US and worldwide.

I agree the other poster's implication that NFL is waning in popularity is absurd. The NFL has been setting new records for viewership every year, and the most recent round of broadcast/streaming deals are the largest ever. This is probably one of the safest decisions ESPN has made recently.

Anecdote!!!!

New Jersey town faces youth football crisis: Nobody wants to play

A youth football team that has been in existence for more than 50 years is in danger of shutting down for the upcoming season.

www.nj.com