The terms of the deal involve NFL Network’s linear and digital rights, which are owned and operated by ESPN and will be fully integrated into ESPN’s direct-to-consumer service, planned for launch ahead of the 2025 football season.
Walt Disney’s (DIS) ESPN unit confirmed Tuesday that it would acquire National Football League (NFL) Network and certain other media assets owned and controlled by the NFL in exchange for a 10% equity stake in ESPN.
Disney stock climbed nearly 2.5% in the overnight session.
The NFL assets proposed for acquisition include the NFL’s linear RedZone Channel and NFL Fantasy. The two entities also entered into a second non-binding agreement, which provides for the NFL out-licensing certain of its content and other intellectual property to ESPN, to be used by the NFL Network and other assets.
The terms of the deal involve NFL Network’s linear and digital rights, which are owned and operated by ESPN and will be fully integrated into ESPN’s direct-to-consumer service, and are planned for launch ahead of the 2025 football season.
ESPN’s platforms will license an additional three NFL games per season to air on NFL Network, and the Disney subsidiary will adjust its overall NFL game schedule, with four games shifting to the NFL Network, which will continue to present seven games per season.
The NFL, meanwhile, will continue to own and operate its retained media businesses, including properties such as NFL Films and key fan-facing platforms.
Disney CEO Bob Iger said the “announcement paves the way for the world’s leading sports media brand and America’s most popular sport to deliver an even more compelling experience for NFL fans, in a way that only ESPN and Disney can.”
NFL Commissioner Roger Goodell said the network’s sale to ESPN will provide more NFL football for more fans in new and innovative ways. Since its launch in 2003, the network has provided football fans access to the sport they love through Thursday Night Football, televising the Combine, or telling incredible football stories through original shows and breaking news, he added.
Disney is scheduled to release its fiscal year third-quarter results on Wednesday before the market opens. More details about the proposed deal may be revealed then.
NFL’s ESPN stake could be valued at $2.5 billion to $3 billion, a Wall Street Journal report said, citing analysts’ valuation estimate of $25 billion to $30 billion for ESPN.
On Stocktwits, retail sentiment toward Disney stayed ‘extremely bullish’ late Tuesday, although improving from ‘neutral’ a week ago. The message volume on the Disney stream also remained ‘high.’
A bullish watcher called this “big news.”
Another user wondered about the timing of the announcement. “This news could easily have been announced tomorrow morning with earnings, but they chose tonight. I wonder why?” they said.
Disney shares have gained 6.7% for the year-to-date period.
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