In keeping with 2025’s magical vibe, the second Iger administration is proving far more radical than the first one. While that sinks in, let’s take a look at two big announcements Disney made this week. The first concerned ESPN, which is undergoing a complete overhaul. The network, to begin with, is being turned into a standalone subscription streaming app. A real one, not one of those “TV Everywhere” apps from a decade ago, where all they showed were clips. That means the new ESPN app will give you access to almost all of the multitude of ESPN networks, including ESPN, ESPN2, SEC Network, ACC Network and ESPNU. But wait, there’s more! ESPN just signed a deal with the NFL that will add the NFL Network to the ESPN mix. It’s a big and significant deal that is going to shake up live sports rights for years to come. Really. Why It Matters You can find a detailed breakdown in the slideshow here, but the top-line takeaways are that the NFL now owns a small chunk of ESPN and gets a new distribution engine and ESPN gets all sorts of NFL content for its new app. This is a win all around. More than that though, it’s the start of a new era in the way sports content is owned and distributed. While that may sound hyperbolic (especially for me) it is pretty major. Sports leagues are starting to take distribution into their own hands and not just be passive recipients of broadcast and cable TV’s largesse. This raises an issue we’ve discussed on here in the past, but worth bringing up again. Essentially there are two models that leagues can use for how to manage content distribution rights. There’s what I’ll call the Socialist Model, where the league essentially exerts a federal style of control over distribution and where profits are pooled in the league’s bank account and then divided up, so that the more popular teams essentially support the lesser ones. Sort of how California supports Mississippi. The argument here is that everyone wins as no team becomes financially dominant to the point where they can buy up all the best players, which ultimately leads to uneven matches and boredom, diminishing everyone’s bottom line as fans flee. Then there’s what I’ll call the Libertarian Model, where every team fends for itself and collects as much money as the market will provide. Meaning that, say, the New York Yankees can sell distribution rights in China and Latin America and keep all the money they make off those deals, while the Cleveland Guardians struggle to get so much as a local broadcast deal going. The argument here is that the league has no right to interfere in individual teams’ businesses and that everyone should be empowered to make as much money as they can. This is how European soccer works, the argument continues, and their games are not “boring” nor have they lost fans. What You Need To Do About It If you are the NBA, you should study this deal closely. You just closed a series of long-term deals, so it’s not an immediate issue, but your content is particularly valuable overseas and so figuring out the best way to handle distribution is well worth your while, as is figuring out if the Socialist or Libertarian model works best for you. If you are MLB, you have started down this road with MLB Local Media. You too need to decide where you want to go next and how much of a role you want to play overall in terms of distribution and rights management. If you are the NHL, elbows up, If you are one of the newly popular women’s sports leagues or Major League Soccer, then watch and learn—you don’t have NFL-style deals yet, but you will have big deals soon—figure out how to take control. If you are Bob Iger—take a bow. You’ve managed to take your cable asset—ESPN—and turn it into something valuable, rather than just bundle it into a “take our cable stuff” white elephant sale the way your competitors have. If you are one of the other major media companies, take notes, but remember that ESPN is a unicorn of sorts, as it has no real competition in a very valuable space. If you are an NFL fan, rejoice. This is mostly a good thing, though you will have to spring for an additional $30/month to get the ESPN app while still holding on to your cable subscription to watch the games on CBS, Fox and NBC. |
