The Walt Disney Co. (DIS) -) is looking for a partner to help with ESPN, and a veteran media analyst is suggesting that the network could look to a rival.
Disney CEO Bob Iger told CNBC on July 13 that the company is looking for “strategic partnerships” to help ESPN’s distribution or content.
Jessica Reif Ehrlich, senior media and entertainment analyst for Bank of America Securities, spoke on “The Marchand and Ourand Sports Media Podcast” on July 19 and suggested that there’s one company that makes sense to her given what ESPN is looking for in the partnership.
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“The first thing that I thought of when [Iger] said content, distribution, maybe a little bit financial, it just screams one company -- and that company is Comcast,” Reif Ehrlich said.
Reif Ehrlich thinks Comcast - (CMCSA) -), which is the parent company of NBCUniversal, is a sensible option given Iger’s suggestion of a strategic partnership rather than an outright sale. She said Comcast also provides a ton of “sports assets” and “an amazing balance sheet.”
She also said that one additional hint that Comcast may be an option for Iger is the timing relative to one of ESPN’s most valuable assets -- its media rights with the NBA.
ESPN/ABC’s hold on those rights expires after the 2024-25 season, but negotiations are ongoing for the next deal.
“There’s been tons and tons of speculation in media that [Comcast] are very interested in NBA,” Reif Ehrlich said. “What Bob said as part of this strategic negotiation was -- it’s likely before they finalize the NBA negotiation.”
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Partnering with Comcast and the reach it could provide ESPN could be a strong pitch to the NBA to retain its rights with Disney, especially as aggressive players like Amazon and Apple could look to outbid Disney.
“For the NBA, NFL, we know for major sports, they absolutely want to have reach,” Reif Ehrlich said. “Broad reach is still broadcasting cable, but you’ve got broadband and direct-to-consumer.”
NBCUniversal already holds broadcasting rights to massive sports entities like the NFL, PGA Tour, and Olympics. It also has a slew of channels and can even offer a streaming platform in Peacock.
Ultimately, Reif Ehrlich believes ESPN is still still a crucial property for Disney, but given the changing media landscape, it’s crucial that Iger steers the ship in the right direction for Disney.
“Sports is probably the most important genre in content. It’s the one piece of content that still commands massive eyeballs, “Reif Ehrlich said. “I think ESPN is really important, but they have to solidify their distribution. If the linear universe continues to fall apart, then they have to be able to transition to streaming.”
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