ESPN to acquire NFL Network, media assets in exchange for 10% equity stake
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The landmark ESPN- NFL Network deal was announced ahead of Disney's earnings report Wednesday. Photo: Robin Alam/ISI Photos/Getty Images
Disney announced Tuesday that ESPN will acquire the National Football League's NFL Network, and would get broad rights to its other media platforms such as RedZone, in exchange for a 10% equity stake in the sports network.
Why it matters: The landmark deal brings the country's biggest sports league even closer to the preeminent sports network as streaming upends live TV.
Zoom in: The deal, announced ahead of Disney's earnings report Wednesday, ensures that ESPN will become the premiere destination for NFL coverage, a key advantage as the network looks to lure subscribers to its new streaming service.
- The agreement allows ESPN to fully own and operate the NFL Network, and integrate it into ESPN's upcoming direct-to-consumer streaming network that's set to debut this fall.
- NFL's Redzone linear channel will join Disney's portfolio of TV networks, giving ESPN broad rights to distribute the NFL RedZone Channel to pay TV operators for continued inclusion into their sports packages.
- ESPN Fantasy will be combined with NFL Fantasy.
- The NFL will continue to own and operate some of its media properties, including NFL Films, NFL+, NFL.com, the NFL Podcast Network, the NFL FAST Channel and the official sites for the league's 32 clubs.
Between the lines: The deal also gives the ESPN licensing rights to more NFL games and certain NFL content that can be used for the NFL Network and other media assets.
- With the agreement, ESPN will get access to three additional national NFL games per season through the NFL Network. It also gets access to the seven existing national games aired by the NFL Network, giving it a total of 28 games per season, versus 22 games before.
The big picture: The mutually beneficial deal allows both ESPN and NFL to more seamlessly transition into the streaming era.
- The NFL can offload the responsibility of owning and operating its own linear media networks in a challenging cable environment.
- Its media assets have a greater distribution opportunity when bundled with ESPN's products.
- ESPN gets more access to NFL content to attract new subscribers.
The bottom line: Both parties lauded the agreement as a win for consumers.
- The deal will provide "more NFL football for more fans in new and innovative ways," NFL Commissioner Roger Goodell said in a statement.
- "Commissioner Goodell and the NFL have built outstanding media assets, and these transactions will add to consumer choice, provide viewers with even greater convenience and quality, and expand the breadth and value proposition of Disney's streaming ecosystem," said Disney CEO Bob Iger.
