By Aldgra Fredly
Disney’s ESPN and the National Football League reached a deal on Aug. 5 for ESPN to acquire NFL Network and other media assets owned by the league in exchange for a 10 percent equity stake.
The assets include the NFL’s linear RedZone channel and NFL Fantasy. ESPN and the NFL did not disclose specific financial terms of the nonbinding agreement.
The NFL stated that it had also agreed in a separate deal to license to ESPN certain content and other intellectual property to be used by NFL Network and other assets.
“Today’s announcement paves the way for the world’s leading sports media brand and America’s most popular sport to deliver an even more compelling experience for NFL fans, in a way that only ESPN and Disney can,” Robert A. Iger, chief executive officer of The Walt Disney Company, said in a joint statement.
ABC, an indirect subsidiary of The Walt Disney Company, owns 80 percent of ESPN, while the remaining 20 percent is held by Hearst.
Iger stated that the acquisition 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.”
Under the agreement, ESPN would gain ownership and operational control of NFL Network, including its linear and digital rights. The network would be integrated into ESPN’s upcoming streaming product, while still being available through traditional pay TV providers.
ESPN chairman Jimmy Pitaro said in May that ESPN’s streaming service will launch in early fall and cost $29.99 per month.
The deal includes a provision allowing ESPN to own broad rights to the RedZone brand and distribute the channel to pay TV operators, while NFL Fantasy Football would be merged with ESPN Fantasy Football.
“By combining these NFL media assets with ESPN’s reach and innovation, we’re creating a premier destination for football fans,” Pitaro said in the statement. “This deal helps fuel ESPN’s digital future, laying the foundation for an even more robust offering as we prepare to launch our new direct-to-consumer service.”
As part of the agreement, ESPN will license three additional NFL games per season, and NFL Network will continue to air seven games per season, with some games shifting from ESPN’s original lineup to NFL Network, according to a statement released by ESPN.
The league stated that it would retain ownership of certain media businesses, including NFL Films and platforms such as NFL+, NFL.com, the NFL Podcast Network, the NFL FAST Channel, and the official sites of all 32 clubs. It would also continue to own, operate, and produce NFL RedZone and retain the rights to distribute the channel digitally.
“Since its launch in 2003, NFL Network has provided millions of fans unprecedented access to the sport they love,” NFL Commissioner Roger Goodell stated. “The Network’s sale to ESPN will build on this remarkable legacy, providing more NFL football for more fans in new and innovative ways.”
The agreements between ESPN and NFL Network are subject to approval from NFL team owners and customary closing conditions, according to the joint statement.
