ESPN eyes messy solution to streaming puzzle
ESPN faces an existential crisis as it seeks to secure a streaming future while the cable TV bundle is in terminal decline. Its solution: Ask sports leagues if they want to buy a stake in the network.
Why it matters: Among a bevy of conflict of interest questions, the "worldwide leader in sports" being partially owned by a major professional sports league would shatter any wall between business and editorial.
What's happening: ESPN — which is owned by Disney — has been searching for a strategic partner since early last year to help it transition to a streaming-first operation.
- No deal is close but multiple sources say ESPN has been discussing equity stakes with the NFL, NBA and MLB.
- The network reportedly held similar talks with distribution partners like Verizon and Amazon.
The big picture: There has always been tension when ESPN reports a negative story on one of the leagues it broadcasts. Giving one of those leagues any ownership stake changes everything.
- "I know that there are conversations from higher-ups at the league office and higher-ups at these networks when there's a story … that they don't like," Michael Smith, a former ESPN reporter, said on The Marchand and Ourand Sports Media Podcast this week.
- "They feel entitled to do that because they're partners. I think there's a difference between partners and ownership."
Be smart: Rival TV networks, who pay billions of dollars to air these games, might see future deals as helping to fund the competition.
Between the lines: It's not completely foreign for networks to be business partners with the sports they cover.
- ESPN partnered with Learfield and the University of Texas on The Longhorn Network. It also operates networks dedicated to the ACC and SEC conferences, though those conferences don't have ownership stakes.
- The Big Ten conference has a 39% stake in The Big Ten Network, which is majority-owned and operated by Fox.
The bottom line: ESPN is trying to keep up with a rapidly evolving media landscape — and its final decision could permanently change how sports are consumed and covered.