On the eve of ESPN’s Monday Night Football opener, chairman Jimmy Pitaro said the network’s sports-rights portfolio is now stronger than it’s ever been, before leaving the door open to the possibility of inking a future equity exchange similar to the deal he recently closed with the NFL.
Speaking Thursday afternoon at the Bank of America Media, Communications & Entertainment Conference, Pitaro said that while ESPN’s stock of live sports holdings is “the best we’ve ever had,” his team will continue to be an active force in the acquisitions market. “We’re always going to look for rights that make sense and rights that we think can drive our business,” Pitaro said, before adding that the cupboard is a little bare at the moment.
“I’m not sure how much there is to acquire over the next few years,” Pitaro said, although he acknowledged that Disney’s move to sell the NFL a 10% stake in its cable flagship in exchange for a chunk of the league’s in-house media assets wasn’t necessarily a one-and-done proposition.
“It’s a unique deal, at a unique moment in time,” Pitaro said. “Whether we would ever try to replicate this, I would say it’d have to make business sense. … If someone comes to us and presents a compelling opportunity, we’re, of course, going to listen.”
A few days before Pitaro made his appearance at the BoA confab, Hans Schroeder, the NFL’s executive VP of media distribution told reporters that he did not believe that the league’s equity stakes in ESPN and Paramount will have any material impact on how the league will assess its rights deals in the coming years.
“The equity won’t affect how we think about the distribution and how we deploy our rights in the future,” Schroeder said earlier this week. “We have had equity in some of our media partnerships over the years, and I think we know how to balance that at an arm’s-length way.”
The NFL became a shareholder in CBS’ parent company by way of its preexisting relationship with Skydance, which closed out its $8 billion takeover of Paramount in August. While the value of NFL’s stake in David Ellison’s new acquisition has not been disclosed, it is not nearly as expansive as its ESPN tithe.
The NFL-ESPN deal is expected to close toward the end of next year, whereupon NFL Network (and its package of live games and studio programming) will officially change hands. Assuming the agreement is approved by federal regulators, ESPN will incorporate the linear TV channel and the NFL RedZone service within its newly launched direct-to-consumer app. Per the terms of the equity swap, the league will continue to own RedZone outright, while ESPN will assume the rights to distribute the feed and trademark the brand.
“There’s opportunity to potentially expand Red Zone, which is an amazing product, potentially expanding it to other sports, other leagues,” Pitaro said. “In terms of the brand, I see a ton of opportunity here.”
Looking further down the road, the NFL may exercise an opt-out clause in its legacy contract with Disney after the 2030 season, or one year after it will have the opportunity to restructure its standing deals with NBC, CBS and Fox. In the meantime, the league has not been shy about its ambition toward expanding its international presence—a strategy that is expected to coincide with the formation of a new standalone 16-game rights package.
While Pitaro said that he hasn’t discussed the ramifications of a beefed-up overseas slate with anyone at the NFL, nothing is off the table for ESPN. “We’re always interested in growing our business,” he said. “If they were to put together an international package, we would, of course, be interested in having the conversation.”
As much as a new package of London, Berlin and São Paulo games seems like an ideal fit for one of the deep-pocketed streamers/tech giants, Pitaro suggested that the scope of Silicon Valley’s interest in sports rights remains to be seen. “You’re seeing them operate with discipline, which I think even a few years ago, a lot of people did not expect,” Pitaro said. “A lot of people expected the big tech players to spend more aggressively, bid more aggressively, than they have.”
Pitaro went on to note that he’s not necessarily convinced that big tech is looking to disenfranchise any of the old-school media partners who’ve been distributing live sports for as long as anyone can remember.
“If you’re a league and you sit down with big tech, you have to ask yourself, ‘How committed are they to sports?’” Pitaro said. “Or, said a different way, ‘How distracted are they going to be? Whereas, when we sit down with ESPN, this is what they do. They breathe this 24/7.’ So, I think we’re in good shape from that perspective.”
Season 56 of Monday Night Football kicks off on ESPN next week live from Soldier Field, as the Vikings take on the Bears in the 129th meeting between these two NFC North rivals. Joe Buck and Troy Aikman will navigate the booth assignment for the flagship, while Peyton and Eli’s ManningCast will ride shotgun on ESPN2. The guest roster for the simulcast has yet to be announced.
