Potentially selling its traditional TV business, Walt Disney may be looking at different kinds of partners. And for ESPN, how about those powerful sports leagues themselves?
When Chief Executive Officer of Disney Robert Iger mulled the idea in a recent CNBC interview -- of possibly selling its legacy TV network business -- analysts' thoughts may have turned to Disney's nearest competitors: NBCUniversal, Paramount Global, or wannabe owners Netflix, Amazon, Apple or others.
According to a CNBC report last week (followed up by a New York Times story recently), ESPN is talking with the biggest sports leagues -- the NFL, NBA, and Major League Baseball -- about a minority stake.
All these leagues have benefited for decades, in major ways, from exposure of their sports on legacy TV -- broadcast, cable, and otherwise -- as well as billions of dollars in sports rights fees.
At the moment, Disney is not looking to give up total control -- just minority stakes, according to reports.
All that makes sense. But long term, any new investor would want to know about its future plans around streaming -- which would include transitioning ESPN in whole to becoming an independent streaming platform. (Currently Disney's ESPN+, a streaming platform, has limited and live programming content).
For a while, analysts have talked up the possibility of spinning off ESP, the long-time profit business for Disney, as a separate company. For many, the rub would be how to make the transition.
Profitability for ESPN still heavily resides with the legacy pay TV system -- not just with heavy advertising revenues, but with the $10 per-subscriber-per-month pay TV distributors to the big sports network.
Iger, always careful with his words, did say Disney was thinking of bringing a “strategic partner” into ESPN. That would suggest a company with a crucial long-time interest in sports specifically.
At the same time, ESPN would be firmly in operating control.
Still, having powerful minority players could at some time down the road have a major influence on the direction of one of the most valued TV networks groups in the business.
When looking at the biggest picture -- about the future of broadcast and cable TV networks -- should we be thinking of more out-of-the-box and unusual partnerships to come?
Investment firms and stock exchanges for business networks?
What about grocery stores and restaurant chains for food channels?