ESPN has been viewed as one of the front-runners to reach an agreement ever since the NFL declared it was seeking to sell NFL Network and other media assets.
After almost five years, a framework has been established.
The NFL and ESPN have reached a nonbinding deal, the league said Tuesday night. The league will receive a 10% equity share in ESPN as part of the agreement, and ESPN will purchase NFL Network, NFL Fantasy, and the rights to offer the RedZone channel to cable and satellite providers.
NFL owners must still approve a final deal that the league and ESPN negotiate. Additionally, regulatory clearances will need to be obtained for the arrangement.
“Great things can occasionally take a long time to reach their ideal state. In an interview with The Associated Press, NFL Commissioner Roger Goodell stated, “And we both feel that it is at this stage.”
The NFL and ESPN will have a second nonbinding agreement in addition to the sale of NFL Network, whereby the NFL will grant ESPN a license to use some NFL programming and other intellectual property that NFL Network may use, as well as other assets that have been acquired.
“Over the past few years, we have been having serious conversations about it. Interestingly enough, though, we began discussing this more than ten years ago, and nothing significant came of it. In an interview with the AP, Disney CEO Bob Iger stated, “And we got back at it when I came back to Disney after my retirement.”
What ESPN gets
Before the end of September, ESPN is anticipated to debut its direct-to-consumer service. For $29.99 a month, the service would provide cord cutters with access to all ESPN networks and programming. The value is increased by the addition of more NFL programs.
As part of their cable, satellite, and most streaming provider subscriptions, many consumers will be able to access the service for free.
“When I came back to Disney and assessed essentially the future of ESPN, it became clear that ESPN had to launch a bigger and more robust and digital or direct-to-consumer product, not only for the sake of ESPN’s business, but for the sports fan,” Iger stated. “And obviously, when you start thinking about high-quality sports content, your eyes immediately head in the direction of the NFL because there’s really nothing more valuable and more popular than that.”
Nearly 50 million people subscribe to NFL Network, which ESPN would own and run as part of its direct-to-consumer offering.
ESPN would distribute the NFL RedZone channel to satellite and cable companies. The NFL will, however, still own, run, and create the channel in addition to keeping the rights to digital distribution. RedZone channels for college basketball, football, and other sports may be on the horizon as ESPN would also acquire the rights to the RedZone name.
ESPN would become the league’s official fantasy football game after NFL Fantasy Football and ESPN Fantasy Football merged.
The NFL Network will continue to broadcast seven games per season. NFL Network would take over four of ESPN’s games, including some that air on Monday evenings in overlapping slots. Three more games that will air on NFL Network will be licensed by ESPN.
What the NFL receives (and retains)
The league receives ten percent of ESPN’s stock. According to senior vice president Aidan O’Connor of the marketing agency Prosek Partners, that would be worth between $2.2 billion and $2.5 billion.
As an indirect subsidiary of The Walt Disney Company, ABC Inc. presently owns 80% of ESPN. Hearst owns the remaining 20 percent. ESPN will be 72% owned by ABC Inc., 18% owned by Hearst, and 10% owned by the NFL if the agreement is finalized and approved.
This is not the first time the league has owned stock in a communications or technology company. SportsLine and Sirius Satellite Radio have that in the past. Because of the NFL’s collaboration with Skydance, the league may also acquire stock in the recently established “Paramount Skydance Corporation,” which is the owner of CBS.
According to Hans Schroeder, executive vice president of media distribution for the NFL, “this is new as far as a partner now operating a business that we built, ran, and grew.” “It’ll also be a little bit new again with some of the dynamics here, but we’ll continue to balance that in a really arm’s length way where we’ll think about how we manage and work across to all our partners.”
The NFL Podcast Network, the NFL FAST Channel (a free streaming channel with advertisements), NFL Films, NFL+, NFL.com, and the official websites of the 32 teams will all remain owned and run by the league.
“The moves align with the NFL’s longstanding ambition to reach $25 billion in annual revenue by 2027 a target first set in 2010, when league revenue stood at approximately $8.5 billion,” O’Connor stated. Financially speaking, the action also lets investors know that ESPN is stepping up its efforts to stand out from the competition and make its content more memorable by providing a premium and limited-edition product in a crowded market. By consciously giving up stock to the NFL, ESPN changes from a media licensee to a genuine platform partner, with few properties that can match the league in terms of audience reach, appointment viewing, cultural relevance, and monetization effectiveness.
No major changes yet
After everything is authorized, viewers probably won’t notice any changes right away until the next year.
The largest beneficiary of this, aside from ESPN, would be NFL Network, which has suffered a decrease in original content in recent years. The network’s flagship program since its debut in 2003, “Total Access,” stopped in May 2024 as a result of several cost-cutting and layoff measures. Last year, “Good Morning Football” relocated to Southern California from New York, where it had resided since its inception in 2016.
In 2021, NFL Network relocated to a broadcast center in Inglewood, California, across the street from SoFi Stadium.
“The fact that we have invested heavily in the network is what excites us. For fans, I believe it has been rather successful. “We’re confident it’s in capable hands,” Goodell stated. “They are creative, capable of identifying and producing excellent work. They’ll do an amazing job running the network and making it even better.”
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