Disney CEO Bob Iger said he sees “tremendous value” in the company’s 11-year rights extension with the NBA despite the significant increase in costs over the previous agreement.
Speaking on the company’s fiscal third-quarter earnings call with Wall Street analysts, Iger also addressed potential partnerships for ESPN. That scenario came up well over a year ago when the company was emerging from a grueling financial stretch, cutting billions in costs and streamlining its work force and content slate.
“Believe it or not. we are still having conversations about it,” Iger said about the potential ESPN team-up. “We continue to believe there may be opportunities to partner with others, particularly on the content side, which is why we continue to explore that. But nothing to add.”
The exec’s comments on the NBA pact were his first since the league announced a set of $77 billion, 11-year rights deals with Disney, NBCUniversal and Amazon.
Iger was asked about the step-up in costs for Disney, which will be paying a reported $2.6 billion a year, up from $1.5 billion in the current agreement, which expires after the 2024-25 season. The CEO said securing the NBA Finals every June for more than another decade would provide a major tentpole for ABC and ESPN, giving the company a consistent advertising and distribution vehicle. Live programming, he said, has been an “advertiser’s delight and an audience’s delight” in recent years.
The “growing value of women’s sports” and the WNBA component of the deal would also justify the cost, Iger added. The long-term agreement also “secures our ability to bring ESPN in a digital direction,” Iger added, especially with the planned 2025 launch of ESPN’s flagship stand-alone streaming service. “We believe that by the time this kicks in a year from now, a lot of the pieces will be in place.”
International NBA rights in many territories, especially for the Finals, would help drive “some added revenue” from streaming subscriptions along with advertising, Iger noted. “I’m not going to get specific about profitability in the early years, but there’s tremendous value in this deal.”
Jill Goldsmith contributed to this report.
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