ESPN would talk to leagues about taking a stake in the network
ESPN has been in talks with some of the most powerful leagues in professional sports, including the National Football League, the National Basketball Association and Major League Baseball, about taking a minority stake in its operations.
The cable network, controlled by the Walt Disney Company, has had exploratory talks with the leagues as it tries to navigate its way forward in the streaming era, said three knowledgeable people, who spoke on condition of anonymity to describe private conversations.
Disney declined to comment.
Disney’s CEO, Robert A. Iger, said in a CNBC interview last week that the company was “looking for strategic partners” who could help ESPN with distribution or content. “But we want to stay in the sports business,” said Mr Iger, whose contract with Disney was recently extended until 2026.
The sale of a stake in ESPN could give Disney a cash injection as it faces costly renewals with sports leagues, including the NBA, which is sure to charge a premium for the rights to feature its games in years to come. Hearst, the owner of magazines like Cosmopolitan and information services like Fitch Group, has a minority stake in ESPN.
ESPN — long a profit center for Disney, which the network acquired in 1995 — has come under pressure in recent years as viewers cut the cable cord in favor of streaming services. Meanwhile, sports rights costs have been pushed up by newer entrants, including Apple, Amazon and YouTube. Trying to outbid tech companies with big pockets is a daunting prospect for cable networks, whose business is in irreversible decline.
Disney executives have stressed that ESPN’s future is in streaming. Bloomberg And The Wall Street Journal recently reported that the sports network was laying the groundwork to make its primary channel, which for a long time existed only on cable, available to streaming viewers. That would create a turning point for traditional TV distributors, who have staved off decline by bringing live sports to cable subscribers.
CNBC previously reported that professional sports leagues were in talks to take a stake in ESPN.
Disney has also faced pressure from a range of activist investors, including Trian Fund Management. Company founder Nelson Peltz, who intended to push Disney to improve its succession planning, called off the fight for a board seat this year. The company has about 6.4 million shares of Disney stock, said a person familiar with the size of the holdings, who spoke on condition of anonymity to discuss internal matters.
Brooks Barnes reporting contributed.