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According to a report from CNBC, executives at ESPN and its parent company Disney have been in preliminary talks about the possibility of a deal that would attract major American professional sports leagues as minority investors.
Disney CEO Bob Iger and ESPN President Jimmy Pitaro are said to have been involved in the talks with the NBA, NFL and MLB, CNBC reported, citing a person familiar with the situation.
ESPN reportedly held talks with the leagues as the cable sports broadcaster considers forming a strategic partnership. “We have a longstanding relationship with Disney and look forward to continuing discussions about the future of our partnership,” an NBA spokesman said in a statement. ESPN, the NFL and MLB have not commented on the matter.
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The ESPN logo is seen on a camera prior to the Cheez-It Bowl college football game between the Air Force Falcons and the Washington State Cougars at Chase Field in Phoenix on December 27, 2019. (Kevin Abele/Icon Sportswire via Getty Images / Getty Images)
The NFL’s media resources consist of NFL Network, RedZone and NFL.com.
Warner Bros. Discovery and Disney currently have exclusive negotiating rights with the NBA. TNT, part of Warner Bros. Discovery, owns the broadcast rights to a substantial NBA package, while ESPN handles broadcasts for a significant number of regular and postseason NBA games.
The negotiation exclusivity of both companies expires in 2024.
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In a recent interview with CNBC, Iger said Disney is looking for a strategic partner for ESPN as the network works toward the transition to streaming. He added that the partner could bring valuable distribution or content to ESPN.
Iger also didn’t rule out the idea of a possible sale of a stake in the company. Disney currently owns 80% of ESPN, while media company Hearst owns the remaining 20%.
Disney CEO Bob Iger attends an NBA game between the Los Angeles Clippers and the Phoenix Suns at Crypto.com Arena on April 20, 2023 in Los Angeles. (Allen Berezovsky/Getty Images / Getty Images)
“Our position in esports is unique and we want to stay in this business,” Iger told CNBC. “We will be open-minded when it comes to finding strategic partners who could help us with either distribution or content. I won’t get into that too much, but we’re optimistic about sport as a media object.”
In theory, a joint subscription streaming service from several major professional sports leagues could give consumers access to unprecedented gaming packages.
ESPN’s business model has primarily relied on cable subscribers, but Disney seems poised to switch as traditional cable subscriptions continue to decline nationwide. Live sporting events still typically bring in good ratings for ESPN, which could be one of the reasons it’s pursuing a potential partnership with the leagues.
However, the NFL, MLB, and NBA generate significant revenue from media rights deals with their respective media partners.
A basketball is seen on the field next to the NBA logo during a break in the first half of a 2023 NBA Summer League game between the Portland Trail Blazers and the Houston Rockets July 7, 2023 at the Thomas & Mack Center in Las Vegas. (Ethan Miller/Getty Images/Getty Images)
It also remains unclear how Disney’s competitors would react if the leagues did in fact acquire a minority stake in ESPN.
Over the years, media outlets have regularly fought bidding wars for the rights to one of America’s major sports leagues. If a league strikes a deal with ESPN, it could mitigate future bidding wars.
Because ESPN already has a commercial relationship with the leagues, the company could take steps to ensure journalists covering the leagues remain as objective as possible.
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Last month, several well-known on-air personalities left ESPN in the wake of Disney’s recent rounds of layoffs.
Those fired included Max Kellerman, Keyshawn Johnson, Jeff Van Gundy, Jalen Rose and LaPhonso Ellis, Fox News Digital previously confirmed. Suzy Kolber, who has worked at the station for 27 years, also announced her dismissal.
“Today I join the many hard working colleagues who have been laid off,” Kolber tweeted June 30. “Heartbreaking – but 27 years at ESPN has been a good run.”
The cuts were part of Disney’s multibillion-dollar cost-cutting initiative aimed at streamlining the company’s operations.