Verizon is the latest player to have discussions with Disney about ESPN’s future.
Disney has had preliminary talks with Verizon focused on creating a new ESPN streaming service, according to The Information.
Verizon is already a key distributor for Disney, with deals that include a current one offering the Disney bundle (Disney+, Hulu with ads and ESPN+ with ads) for a discounted $10 per month to Verizon MyPlan customers.
Disney CEO Bob Iger has said that a direct-to-consumer version of the ESPN cable network is “not a matter of if, but when,” and has also said that Disney is open to selling a stake in the network to a strategic partner.
Verizon CEO Hans Vestberg has recently expressed his interest in partnering with Disney on a streaming version of ESPN to sports leagues and teams, according to the report.
Verizon has more than 92.5 million wireless subscribers and has relationships with the NFL that include a new deal with the Washington Commanders to be the team’s official 5G provider.
Thanks to cord-cutting, the network’s household reach on cable has dropped to 72.5 million, from more than 100 million in 2011. In addition, ESPN+ lost a few subscribers for the first time in Disney’s latest quarter — dipping to 25.2 million from 25.3 million in the previous quarter.
In Disney’s earnings call last week, Iger said Disney is not necessarily looking for a “cash infusion” from ESPN partners, but companies that can help ESPN transition to a D2C model in the form of contribution content, distribution and marketing support, or both.
In late July, Iger tapped former Disney executives Kevin Mayer and Tom Staggs to consult with him, ESPN chairman Jimmy Pitaro and others on the strategy for Disney’s D2C operations.
Mayer previously led Disney’s D2C business and helped spearhead the nearly $4-billion acquisition of the MLB BAMTech technology now used by ESPN+, as well as Hulu and Disney+.