The ESPN NFL Media deal is moving towards the endzone with both sides seeing the benefit of a partnership. But for the first time, we now know some of the parameters that would exist in an agreement, and they are huge.
On Wednesday, The Athletic’s Andrew Marchand reported the on-again, off-again deal was definitely on again and on the doorstep of being finalized. On Thursday, CNBC’s Alex Sherman gave some more details on what could be at stake.
For ESPN, it would be taking ownership of NFL Network and RedZone with other potential NFL Media assets available for Bristol’s new direct-to-consumer platform.
For the NFL, it could be up to a 10% ownership stake in ESPN according to Sherman.
From what I’m told, the NFL is considering taking a minority stake in ESPN – possibly around 10%. These discussions are ongoing, and it’s possible the final deal may arrive at a smaller stake, the people said.
ESPN, for its part, wouldn’t take equity ownership in the NFL, like it just did for the Premier Lacrosse League, I’m told.
ESPN would own all of NFL Network and NFL RedZone, rather than just a controlling stake, if the deal moves forward as currently constructed, according to people familiar with the matter. But ESPN isn’t in talks to acquire all of NFL Media, the umbrella company that owns NFL Network, NFL RedZone, NFL Films, NFL.com, the NFL app and NFL+. Rather, ESPN would only acquire some of those assets, while potentially doing partnership deals with others.
In case you are wondering, the last public valuation we have of ESPN is one from 2023 where Bank of America listed the company as being worth an estimated $24 billion. Incredibly, that number has been cut in half in the last ten years thanks to cord cutting and the collapse of the cable industry as it once stood at $50 million. Given the most recent numbers and where the cable industry has continued to move, it stands to reason that the 10% stake could be worth anywhere between $2-2.5 billion. In other words, just a little bit less than one year of Monday Night Football rights.
ESPN is trying to fight against those headwinds, hence this NFL deal and their new DTC platform. ESPN has been more conservative in their spending in some areas, but more aggressive in others. And by far their most aggressive spend is with the NFL, who they could soon officially be business partners with. While ESPN has been willing to let some rights go like F1, they have spent billions on NFL rights and tens of millions on broadcasters from Joe Buck and Troy Aikman to Jason Kelce.
And that should come as no surprise – the NFL is the top sports and entertainment industry in the country. If there’s anyone ESPN would want to hitch their wagon to, it is them.
But there is truly no way to undersell the importance of this deal and the transformative impact it would have on the sports media landscape.
The biggest sports league in America could soon have a significant equity stake in the WorldWide Leader in Sports. ESPN would run NFL Network, opening the door to all kinds of collaborations and crossovers. ESPN would also own RedZone, opening up a potential opportunity to place it on its DTC platform if it could be worked out with the Sunday Ticket deal with YouTube.
What does it mean for ESPN, though? Will their daily coverage lean even more in to the NFL, if that’s even possible? And what about journalistically? Can ESPN fairly report on the NFL or will the NFL put the squeeze on their reporting as has been accused at NFL Media? ESPN has always had to walk a fine line between their journalistic interests and their business interests with covering sports fairly and truthfully while also being in billion dollar relationships with them. But the NFL owning a significant stake in ESPN doesn’t just open up Pandora’s Box, it smashes it with a sledgehammer.
But for now, it’s a win-win deal for both sides. ESPN President Jimmy Pitaro gets the equity stake he wants and the additional content he craves as the network tries to thread the needle in trying to build up a worthwhile streaming platform while keeping their linear business alive. And the NFL gets to offload some of their media assets while getting a stake in a multi-billion dollar media company.
It also stands to reason that any future rights deal the NFL strikes would be tilted firmly in the favor of ESPN, which could make this agreement even more worthwhile for both parties.
About Matt Yoder