On the eve of Disney’s next earnings call, ESPN finally announced the most anticipated news in sports media – an equity deal with the NFL.
The news of a potential ESPN-NFL marriage has been the subject of much reporting over the last couple years, specifically around ESPN looking for an equity partner and searching for content for their upcoming direct-to-consumer platform. But after talks with the NFL reportedly went on and off again, the two sides closed in on a deal earlier this summer.
Tuesday night, it finally became official.
According to an announcement from ESPN, the WorldWide Leader in Sports will now become the owner and operator of NFL Network, as well as RedZone Channel and NFL Fantasy. In exchange, the NFL will own a 10% equity stake in ESPN.
Additionally, the NFL will license even more content to ESPN. NFL commissioner Roger Goodell, Disney CEO Bob Iger, and ESPN President Jimmy Pitaro all commented on the groundbreaking deal in the accompanying announcement.
ESPN, a subsidiary of The Walt Disney Company (NYSE: DIS), and the National Football League (NFL) today announced a non-binding agreement under which ESPN will acquire NFL Network and certain other media assets owned and controlled by the NFL – including NFL’s linear RedZone Channel, and NFL Fantasy – in exchange for a 10% equity stake in ESPN. In addition to the sale of NFL Network, the NFL and ESPN are also entering into a second non-binding agreement, under which the NFL will license to ESPN certain NFL content and other intellectual property to be used by NFL Network and other assets.
These transactions between America’s most popular sporting league and the world’s most innovative sports media leader are designed to set a new standard for how professional football is delivered, experienced and celebrated by fans.
“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,” said Robert A. Iger, Chief Executive Officer of The Walt Disney Company. “Commissioner Goodell and the NFL have built outstanding media assets, and these transactions 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.”
“Since its launch in 2003, NFL Network has provided millions of fans unprecedented access to the sport they love,” said NFL Commissioner Roger Goodell. “Whether it was debuting Thursday Night Football, televising the Combine, or telling incredible football stories through original shows and breaking news, NFL Network has delivered. The Network’s sale to ESPN will build on this remarkable legacy, providing more NFL football for more fans in new and innovative ways.”
“This is an exciting day for sports fans,” said Jimmy Pitaro, Chairman of ESPN. “By combining these NFL media assets with ESPN’s reach and innovation, we’re creating a premier destination for football fans. Together, ESPN and the NFL are redefining how fans engage with the game—anytime, anywhere. 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.”
The centerpieces of the deal are certainly NFL Network, which will now become a part of the ESPN DTC lineup when it launches later this fall, and RedZone Channel. ESPN does mention distributing RedZone to pay TV operators, but it does not mention the DTC service or current Sunday Ticket deal with YouTube.
ESPN will also license three more NFL games per season that will air on NFL Network. ESPN will also shift four of their existing games, presumably scheduled Monday Night Football doubleheaders with overlapping or consecutive broadcast windows, to NFL Network.
The NFL will maintain ownership over several other of their key properties including NFL.com, NFL Films, and more.
When this ESPN quest started years ago, the hopes in Bristol were to find an equity partner that could invest in the network and gain content for the new streaming service. ESPN and President Jimmy Pitaro has achieved both of those objectives with this NFL agreement.