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Report: Disney holds talks with Verizon over ESPN partnership

Media giant is seeking a strategic partner for ESPN ahead of full DTC service.

21 Aug 2023 Steve McCaskill

Getty Images

  • Disney has reportedly also spoke with major leagues
  • Apple, Amazon, Google and Microsoft have been linked
  • DTC ESPN could launch in 2025 or 2026

Disney has held talks with US mobile operator Verizon about becoming a strategic partner for the future direct-to-consumer (DTC) version of ESPN, according to The Information.

At present, the flagship ESPN linear channel and the ESPN+ streaming platform have been operated in isolation.

This means the only way to watch ESPN’s most important sporting events, including the National Football League’s (NFL) Monday Night Football, college football and the National Basketball Association (NBA), is through cable.

However, Disney is preparing to combine its flagship sports network with the existing ESPN+ streaming service as early as 2025 and has confirmed it is looking for a strategic investor that can assist either with distribution or programming.

The media giant has reportedly also spoken with the National Football League (NFL), the National Basketball Association (NBA) and Major League Baseball (MLB) regarding potential tie-ups that would give ESPN additional content and some protection against the escalating cost of premium sports rights.

But a partner from the tech and telecoms sector is thought to be a greater priority given the need to get the new ESPN DTC service on as many screens as possible.

Apple, Amazon, Google, Microsoft and T-Mobile have all been touted as possibilities, while Verizon’s chief executive Hans Vestberg is said to be especially keen on a deal.

Verizon and Disney have the added advantage of working together previously, with the former’s customers receiving free Disney+ for a year.

SportsPro says…

ESPN has been one of the main beneficiaries of the bundle model that had served US broadcasting so well for several decades and is now the glue still holding it together.

No alternative to the bundle will be as effortlessly lucrative – ESPN receives US$10 per cable subscriber regardless of whether they want it or not.

But Disney knows the writing is on the wall as the number of pay-TV households in the US decreases. It also knows to achieve anything approaching the same revenues as cable, Disney knows it needs scale and assistance with the additional sales and marketing costs that DTC requires.

ESPN+ currently has 24.9 subscribers, while ESPN is currently available in an estimated 70 million homes. Verizon’s customer base of 93 million would represent a significant opportunity for the new DTC version of ESPN to expand into, while the operator’s pre-existing billing relationships and marketing power would assist with adoption and awareness of the expanded service.

Verizon sees sport as a key differentiator as it competes with AT&T and T-Mobile in the US mobile market. It already offers NFL Sunday Ticket and NFL+ and has commercial partnerships with the NFL and many of its teams. The addition of ESPN’s Monday Night Football (along with multiple other sports) into the mix would be a significant amount of brand building and a tempting offer for ardent football fans.

The bundle is dead. Long live the bundle.

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