As the competition for sports streaming rights escalates, with YouTube, Netflix and Amazon challenging traditional media companies for game packages, Disney has found an innovative way to strengthen its grip on football.
The Walt Disney Company, which owns ESPN, and the National Football League on Tuesday night announced a complicated deal for the N.F.L. to take a 10 percent equity stake in ESPN. In exchange, ESPN will acquire the league’s traditional NFL Network and certain rights to the fan-favorite RedZone Channel, among other media assets.
NFL Fantasy football, for instance, will merge with ESPN Fantasy Football.
“This is a gigantic leap forward for ESPN as it gets ready to launch its service,” Robert A. Iger, Disney’s chief executive, said in an interview, noting that the NFL Network would be “seamlessly integrated” with ESPN’s flagship streaming service, which is expected to be introduced this month.
“We think that it will go a long way toward improving ESPN’s prospects when it migrates more and more into a direct-to-consumer product,” Mr. Iger said. ESPN’s new streaming service, which will cost $30 a month, will include all ESPN programming, including live events — some 47,000 a year. For the first time, ESPN viewers will not need a cable or satellite subscription.
ESPN was Disney’s financial engine for nearly 30 years, powering the company through recessions, box-office wipeouts and the pandemic. In 2023, however, Mr. Iger and Jimmy Pitaro, ESPN’s chairman, started to explore a once-unthinkable sale of a stake in the division as a way to confront the turbulent economics of the streaming era.
In 2013, roughly 100 million households received ESPN. Today, as a result of cord cutting, that number is closer to 61 million. ESPN has raised its affiliate fees to keep profitability high, but its ability to continue doing so will be limited in the coming years: By 2027, fewer than 50 million homes will pay for a cable hookup, according to PwC, the accounting giant.
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The post ESPN, Leaping to Streaming, Holds Hands With the N.F.L. appeared first on New York Times.
