A Step In The Right Direction for ESPN
It’s great that the NFL and Disney (DIS) are in talks for the NFL to acquire a stake in ESPN. ESPN needs sports content that it owns outright or that it controls over the long-term if ESPN is to be spun out as a standalone company by Disney this year. ESPN is worth little without owning or controlling sports content IP. Further, licensing sports content will become increasingly expensive with Amazon, YouTube, Warner Brothers Discovery and Apple playing in the space and bidding up prices.
We continue to believe that ESPN/Disney ought to acquire Endeavor Group (EDR) as we recently wrote. An acquisition of EDR would bring TKO group (TKO, owner of the UFC and WWE) into the ESPN portfolio which will lock-up UFC and WWE content in perpetuity.
Both the UFC and WWE are global brands and make sense for ESPN to own. ESPN has partnered with the UFC since May 2018. ESPN+ has been the exclusive broadcaster of live UFC pay-per-view events since 2019. UFC is the media property that put ESPN+ on the map (Disney launched its ESPN+ streaming service in April 2018).