The five-year, $85 million licensing deal to bring The Pat McAfee Show to ESPN was orchestrated by the highest-ranking executives at Disney and hailed as the symbol of a new era of sports media.
Many have questioned, however, if the large investment in McAfee made fiscal sense for Disney.
Many in the industry believed there wouldn’t be any real clarity on ESPN’s ROI until ESPN launched either Venu or their DTC product, both of which are aimed at younger views who may not subscribe to cable (which is likely to apply to a sizable chunk of McAfee’s large following).
While we’re a full year away from having any insight on that front, we have our first morsel on how the economics of that deal might be shaking out as ESPN recently shared that his two-hour show on their network is indeed profitable.
This is certainly of interest given the MASSIVE dustup for the ages when the New York Post published an article critical of the show’s ratings and costs which McAfee took great offense to then and has brought up as recently as two weeks ago.
In an appearance on The Varsity podcast released Wednesday, Ben Strauss of The Washington Post reported that ESPN officials told him they in fact do make money off the historic deal to which they signed McAfee in 2023.
“I did ask ESPN … does The Pat McAfee Show make money for ESPN?” Strauss said. “And the answer was yes.”
While Strauss did not get exact financial details from Disney, the WaPo media reporter was told the Worldwide Leader is bringing in more money off McAfee’s show than it is paying him on the licensing deal.
Before PMS took over the noon-2 p.m. ET slot on ESPN, the network aired SportsCenter and This Just In with Max Kellerman. So the first factor in the financial calculus around PMS is how ESPN’s cost structure changed from producing those two shows versus licensing PMS. It’s possible and perhaps even likely that ESPN saved some money by paying a flat $15 million a year for those two hours of programming which would lower the bar of how much money those two hours would have to bring in to breakeven.
While PMS does not air traditional commercials every 10-20 minutes like a typical television program, the show has a large digital footprint on ESPN platforms such as ESPN+ and TikTok in addition to YouTube. ESPN also floods its social and digital channels with clips from PMS which also help monetize the show.
It remains to be seen whether claims by Disney and ESPN about McAfee’s ability to transform its audience and anchor its push into a digital-first business meets expectations. As The Varsity host John Ourand pointed out after Strauss’ report on the podcast, ESPN has a long way to go to ensuring they can remain as profitable as they historically have been in a world where they pay $10 billion a year for sports rights while the amount of people subscribing to ESPN through cable continues to trend downwards.
