ESPN has been owned by Disney since 1996, becoming the worldwide leader in sports as the home to coverage and reporting for every major sport. Now, as Disney continues to make further changes to its long-term structure, the future of one of its most well-known brands faces uncertainty.
Even before ESPN underwent massive restructuring ordered by Disney, resulting in many on-air talent being dismissed, the company’s long-term partnership with Disney seemed iffy. There was a possibility of The Walt Disney Company selling the sports media company outright or finding a partner to share it with.
Currently, The Walt Disney Company owns 80 percent of ESPN with 20 percent of it controlled by Hearst Communications. However, the door is now open for the possibility of significant changes that would have major ramifications on sports coverage and entertainment for years to come.
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During the summer, Disney was in talks with the NFL, MLB and NBA on a potential strategic business alignment. In the eyes of Disney CEO Bob Iger, partnering with one of the most popular sports leagues in the world would provide long-term security and could prove to be a beneficial deal for both sides.
While the NFL, NBA and MLB are all interested, there’s also competition. Front Office Sports previously reported that companies like Apple and Verizon are also interested in potential deals to become equity partners in the top sports media company. However, it will come at a staggering cost.
According to Eric Fisher of Front Office Sports, the Bank of America Global Research found that ESPN carries a valuation of $24 billion, making it even more enticing to sports leagues and major companies that want a piece of the action.
Not only does the valuation help explain the level of interest in a potential equity deal, it also provides a scope for just how big ESPN is and the company’s ability to remain strong even after yearly layoffs and massive changes to the landscape of how fans watch sports.
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Meanwhile, Disney is still looking for ways to strengthen ESPN’s reach over professional sports. There are active negotiations for the future broadcast rights to the College Football Playoff and expanded TV broadcasting rights with the NFL and NBA remain under long-term consideration.
While Disney wouldn’t sell ESPN outright for $24-plus billion, any agreement made would likely be a multi-billion deal. Another way to put things into perspective, the ESPN valuation is greater than the combined franchise values of the Dallas Cowboys ($9 billion), New England Patriots ($7 billion) and Los Angeles Rams ($6.9 billion).
