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ESPN continues search for strategic partner

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Jan 18, 2024

Photo: Robin Alam/Icon Sportswire via Getty Images

ESPN continues to be engaged with multiple parties during its long search for a strategic partner.

Why it matters: ESPN is trying to keep up with a rapidly evolving media landscape that is permanently changing how we consume sports.

State of play: Three sources tell Axios that ESPN is still discussing an equity stake with multiple partners, including the NFL, NBA and MLB.

  • Over the weekend, ESPN was reportedly in "advanced talks" with the NFL on a deal that would see the league take an equity stake in the network, while ESPN gained control over the NFL's media arm that includes NFL Network.
  • The NFL and ESPN both declined to comment, but a league source strongly pushed back on the reports that a deal was close, adding that the NFL wasn't interested in giving up control of NFL Media (the league has been on its own search for a strategic partner for its media business since 2021).
  • MLB and NBA have also declined to comment.

Be smart: Any deal between ESPN and one of the leagues would raise all sorts of conflicts of interest.

  • Those include ESPN's journalistic independence as well as concerns from rival TV networks who pay for rights fees that they'd essentially be helping to fund a competitor.

Zoom out: ESPN's future is at the top of the list of questions Disney CEO Bob Iger needs to answer before he exits after 2026.

  • ESPN, a cash cow for decades as the most expensive cable channel, is managing the terminal decline of the cable industry. It plans to launch a fully fledged streaming version of the channel sometime next year.
  • ESPN has already secured a rights renewal, at a hefty price increase, with the NCAA for the majority of its championships. The network is closing in on keeping the expanded College Football Playoff before turning its attention to the NBA.

What they're saying: "Disney is banking that enough will be willing to pay to access top-tier rights across a number of leagues to sustain an ESPN DTC offering," MoffettNathanson analysts wrote Wednesday afternoon. "Key to that vision is bringing in more partners for the service to unlock broader distribution and bundle in an even greater number of rights."

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