The National Football League has entered into an agreement to acquire a 10% stake in ESPN in exchange for the NFL Network and other media assets, the companies announced Tuesday, in a deal that more closely binds together one of the largest media companies with the world’s most valuable sports league.
As part of the deal, ESPN will take control of the NFL Network, its linear RedZone Channel and NFL Fantasy. The league will continue to own and operate NFL Films, NFL+, NFL.com, the NFL Podcast Network, the NFL FAST channel and the official sites for the league’s 32 clubs. It will also continue to own, operate, and produce NFL RedZone and retain the rights to distribute NFL RedZone digitally.
The parties are also entering into an agreement for the NFL Network and other assets to license the league’s content and IP, giving ESPN access to a steady flow of games. Disney currently owns 80% of ESPN, while Hearst owns the remaining 20%.
The deal underscores the power that the NFL yields, with games that regularly top broadcast ratings and have been at the center of several fights over broadcast rights. Having access this content is key for Disney, which is set to launch its own ESPN streaming service in the fall, with NFL games a key linchpin. The alliance also puts both sides in new territory, with ESPN now in the unenviable position of covering a league that is also a minority owner.
Ultimately, the prospect of Disney cozying up to the NFL ahead of any potential rights negotiations down the line was too irresisttable.
If approved, the deal would give ESPN broad rights to the RedZone brand and to distribute the NFL RedZone channel to pay TV operators for continued inclusion in their sports packages. NFL Fantasy Football would also merge with ESPN Fantasy Football.
ESPN’s platforms would license an additional three NFL games per season to air on NFL Network and adjust its game schedule to have four games, including some in overlapping windows, shift to the NFL Network, which will continue to present seven games per season.
“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,” said NFL Commissioner Roger Goodell said in a statement. “The Network’s sale to ESPN will build on this remarkable legacy, providing more NFL football for more fans in new and innovative ways.”
“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,” Disney CEO Bob Iger said. “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.”
“By combining these NFL media assets with ESPN’s reach and innovation, we’re creating a premier destination for football fans,” ESPN chairman Jimmy Pitaro added. “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.”
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This deal represents a big boost to ESPN’s upcoming streaming service. NFL Network will be fully integrated into the service alongside traditional pay television distribution.
The service’s Unlimited plan, which includes access to 47,000 live events, studio shows and more, will cost $29.99 per month/$299.99 per year standalone, $35.99 in a bundle with ads on Disney+ and Hulu and $44.99 per month with no ads on Disney+ and Hulu. At launch, the bundle will cost $29.99 for the first 12 months. Meanwhile, the Select plan, which includes all the content currently available on ESPN+, will be $11.99 per month/$119.99 per year. It will cost $16.99 per month with ad-supported Disney+ and Hulu and $26.99 per month with ad-free Disney+ and Hulu.
In addition, ESPN content is available on streaming via the cheaper, standalone ESPN+ service for $11.99 per month, which the company will continue to market and sell in part due to contractual rights commitments with several leagues, both domestically and internationally, and through a tile in Disney+ available for bundle subscribers.
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The deal also comes as the NFL has the option of exercising an opt-out clause to get out of its current media rights deals after the 2028-2029 season. In 2021, the league reached agreements with Amazon, CBS, ESPN/ABC, FOX and NBC, collectively valued at over $100 billion.
“We really went a long way to put that into our contracts in the last agreement. I think having the option to do that will be valuable for us, but we haven’t made any decision on that,” Goodell told CNBC last month. “We are very proud of our partnerships. We think that they’re doing a wonderful job for the NFL. We’ll look and we’ll have the ability to see how the media landscape changes.”
The announcement comes ahead of Disney’s third-quarter earnings report on Wednesday before the market opens.