Disney’s pursuit of a strategic partnership with one or more of the “Big Four” leagues may not go very far.
The NBA and Major League Baseball are wary of purchasing a stake in ESPN if doing so means reducing — or eliminating — the network’s rights fees, CNBC reported Thursday. Talks between Disney and the leagues have included few specifics and are said to be in the “idea” stage.
Disney is pursuing a “strategic partner” for ESPN to help with content and distribution as it prepares to take the network direct-to-subscriber. Discussions with the leagues would clearly fall on the content side (Disney has told the leagues it is holding separate discussions on distribution), but as ESPN already owns rights to each of the “Big Four,” it is unclear how a partnership would benefit Disney outside of a reduction in costs.
One possibility is the acquisition of local rights, which Bloomberg and The Wall Street Journal have both reported Disney is pursuing — but even on that front, Disney is said to be uninterested in paying the usual rate.
On a related note, a Disney spinoff of ESPN remains “on the table” per CNBC, but only if it retains majority control of the network. Disney CEO Bob Iger has stressed that he views ESPN “very differently” from the company’s other linear networks, which he has repeatedly hinted could be sold off entirely.
The Hollywood Reporter floated Wednesday that Disney itself could be up for sale, examining the possibility of an acquisition by Apple. (Apple, at $2.8 trillion, has a market cap many times higher than that of Disney). The idea is one that “keeps being discussed,” per the article.
Amidst the speculation, some concrete news to come out of Disney the past 48 hours is that the company will raise prices on its three direct-to-subscriber streaming services, Hulu (from $15/mo to $17 for the ad-free tier), Disney+ (from $11/mo to $14 for the ad-free tier) and — germane to the topic of this website — ESPN+ (from $10/mo to $11). Disney’s direct-to-subscriber platforms lost $512 million last quarter, but that was a noticeable improvement over the previous quarter ($659M) and last year ($1.1B).
