Commentary

Sports League Equity Partner Deals For ESPN? Chapek Says It Doesn't Need Them

Former Walt Disney CEO Bob Chapek doesn't think ESPN needs any minority partners -- like the NFL. The league has been rumored to possibly be in the mix for such a deal.

While Chapek believes extra cash from a minority deal would be a good thing, he says it’s better for ESPN to grow into a one-stop navigation for all things sports. That would dramatically increase its value.

Chapek made these comments as part of a CNBC documentary.

Currently ESPN has a lot going on: Big multi-level streaming plans for the sports network and transitioning and distribution issues for the big sport TV network, as well as a complicated proxy fight Walt Disney is having with Nelson Peltz’s Trian Fund Management.

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Nine months ago, current CEO Bob Iger said he would consider selling a minority stake in ESPN to bolster resources and operational needs, which also include a new direct-to-consumer (D2C) offering tentatively slated to launch in the fall of 2025.

Currently, Disney owns an 80% interest in ESPN with a minority stake of 20% owned by Hearst -- an arrangement that has been in place for nearly 30 years.
 
Although Chapek doesn’t feel that any major changes -- such as another minority investor -- are needed, the analysis from the former senior Disney executives now begs another question.
 
How do potential sports leagues feel about the complications of a potential major streaming platform “hub” launch -- one co-owned among Disney (ESPN), Fox Corp. and Warner Bros. Discovery, which some insiders are calling “Spulu?”

It seems that the NFL was a bit miffed about not getting a heads up about those discussions.

In response, Brian Rolapp, chief media and business officer of the NFL, said he believed consumers could get all of the NFL linear TV-network based franchises -- around $20 per month more -- with YouTube TV, a virtual pay TV network seller, priced at around $73/month.

Analysts and TV network executives believe the Disney-Fox-Warner Bros. Spulu platform would cost $40 to $50 a month.

Analysts and Chapek also believe potential ESPN partners --like the NFL -- could complicate things -- especially when certain high-profile sports games/content from each major sport including Major League Baseball, the NBA, and the NHL run opposite each other’s content at times, or demand higher on- and off-air promotional considerations.

Would ESPN be better with a technology/broadband/communications company such as Apple or Verizon -- to better help its future streaming/digital needs that presumably keep evolving? Yes. But perhaps program “discovery” -- including the ability for ESPN to be a “central clearinghouse” -- would be better.

The NFL then, as a ESPN partner, would also need to be sold that when it comes to all TV sports programming -- the powerful, and the less so-- they are in this together. 

Well then, look out for some kumbaya TV-streaming business deals.
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About the Author

Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.