The Disney, Fox, Warner Brothers Sports JV Is A Half Measure
The Disney/ESPN (DIS), Fox (FOXA), Warner Brothers (WBD) sports joint venture will enable the three companies to share the cost of licensing sports content. That’s important given that Google (GOOGL), Amazon (AMZN) and Apple (AAPL) play in the live sports arena and each have significantly larger balance sheets than Disney, Fox and Warner Brothers. However, the JV ought to pursue live sports content acquisitions as owning IP builds long-term value in a way in which licensing content can not.
I believe the best strategic move the joint venture could make would be to acquire sports content versus licensing. Licensing sports content is getting increasingly expensive and there is no IP ownership when licensing content. Nothing upon which to build. John Malone’s Warner Brothers knows this as Malone’s Liberty Media acquired F1 Group and WBD made a run at WWE (now TKO) before Endeavor (EDR) won the bid. This JV should move to acquire TKO from Endeavor (EDR owns a 51% stake in TKO).
In addition, this JV will give WBD CEO David Zaslav and Chairman John Malone additional insight into Disney, not that Bob Iger is a stranger to Malone or Zaslav. In a perfect world I would like to see DIS acquire WBD and for David Zaslav to run the combined company. Zaslav gets in the weeds in a way that Iger does not.