ESPN is reportedly discussing the possibility of acquiring local rights to “Big Four” teams as part of its search for a strategic partner.
Major League Baseball and ESPN have held preliminary discussions about distributing local games in select markets, The Wall Street Journal reported Thursday. Per the report, games could be distributed as an add-on to the ESPN+ streaming service. ESPN is said to see “potential” in distributing games locally — in baseball and beyond — but not at the price of a large rights fee.
Local sports rights are in flux in large measure due to the bankruptcy of Diamond Sports Group, which oversees the Bally Sports-branded RSNs and filed for Chapter 11 earlier this year. Major League Baseball has already this year taken back local rights to the San Diego Padres and Arizona Diamondbacks, distributing those teams’ games through MLB.tv, cable, satellite and streaming MVPDs. (Those RSNs, it should be noted, briefly belonged to Disney after its $71 billion acquisition of 21st Century Fox assets in 2019. It was forced to divest the channels and ended up selling them far below market value to Sinclair Broadcasting.)
The discussions are part of talks between ESPN parent company Disney and the “Big Four” sports leagues about potentially acquiring a stake in ESPN as part of a strategic partnership. One presumes that an ESPN partly owned by the leagues would not have to pay the going rate for local (or national) rights.
Per the WSJ report, the strategic partnership discussions have already “intersected” with ESPN’s NBA media rights talks. The Athletic reported earlier this year that the NBA’s new media rights deals — which go into effect in the 2025-26 season — are expected to be struck by the end of the coming season.
While discussions with the leagues are ongoing, Disney is also said to be considering tech companies for the partnership role. The New York Post reported earlier this week that a tech company was the most likely option. Per the WSJ, ESPN could opt for “more than one” strategic partner; presumably that would mean more than one type (a league and a tech company, for example).
The driving force behind the recent upheaval at ESPN and elsewhere is the collapsing cable universe. Per the August Nielsen universe estimates, ESPN is now said to be in 71.32 million homes, down from 74.21 million in December and fewer than FS1 (71.38M). Per the Post, ESPN is expected to take its flagship network direct-to-subscriber in two or three years.
(News from WSJ 8.3, with additional information from Sports TV Ratings 8.3)
