Saints are one of the NFL's youngest teams after 2026 draft
After the 2026 draft, the Saints are now one of the NFL's youngest teams.
ESPN has not yet begun negotiations with the NFL to renew their media contracts, despite the league's interest in revisiting deals worth over $100 billion. Disney's CFO expressed confidence in a long-term partnership with the NFL.
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Credit: Kirby Lee-USA TODAY Sports
The Walt Disney Company has yet to start negotiations with the NFL on re-opening their media contracts, even as the league is keen on redoing all of its deals that were originally inked in 2021 for over $100 billion, and which went into effect with the 2023 season.
Since, the NBA inked media deals worth $75 billion, strongly suggesting the NFLās contracts were underpriced given footballās far stronger audience metric than basketballās.Ā In what seemed to be a prepared remark, Disney chief financial officer Hugh Johnston told an analysts earning call this morning that the company expects to be in business with the NFL for a long time.
Given the NFL now owns 10 percent of ESPN, a stake the league received in exchange for the NFL Network and RedZone, itās hard to quibble with Johnstonās optimism.
āYou know our relationship with the NFL is as broad and as deep as itās ever been, and weāre excited looking ahead to the upcoming NFL season with the NFL Network and with red zone linear now part of our distribution portfolio, on top of Monday Night Football and broader NFL coverage,ā he said. āTo get to your question specifically, we havenāt yet engaged with the league on early renewal conversations, but weāre not dogmatic about the process, and weāre always willing to have a conversation with the NFL in an effort to find new opportunities for growth. We expect to be in business with the league for years to come, and weāll, of course, evaluate this deal as we would any deal with discipline and a focus on driving value for Disney shareholders. In that regard, weāre really looking forward to our year of the Super Bowl and all that it can bring to both football fans and Disney shareholders in the coming year.ā
Disney changed the structure of the earnings call, requiring analysts to submit questions, rather than ask them live.Ā Thus, Johnstonās remarks could haveāand almost surely were āprepared beforehand.
ESPN has not initiated negotiations with the NFL, even though the league is eager to revisit its media contracts.
The NFL's media contracts, originally valued at over $100 billion, may be underpriced compared to recent NBA deals worth $75 billion.
The NFL owns 10 percent of ESPN, a stake acquired in exchange for the NFL Network and RedZone.
Disney's CFO, Hugh Johnston, expressed optimism about a long-term partnership with the NFL during an earnings call.
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The call was the first for new Disney CEO Josh DāAmaro, who took over from Robert Iger. DāAmaro, who previously oversaw theme parks and cruise ships, focused his remarks largely on the parks and movie side of the business during the call, leaving most references to the NFL and sports to Johnston.
For example, when it came to a macro take on ESPN and sports, it was Johnston who spoke.
āTurning to sports in totality, we view ABC as strategically connected when we think about ESPN and sports in general,ā he said. āSports is admittedly a separate discussion in that it is much earlier in its monetization transition, having just launched Unlimited [the new app] last year. However, when we look at the marketplace for streaming in our competitive set, Netflix, Prime Video, YouTube, Paramount+, all of them are increasing their position in live sports. Sports rights are expensive and can be dilutive without scale, but we have scale in our most important market, the US and the biggest sports media brand in the world, in ESPN. We view sports as a key part of our programming strategy, and ESPN as an important contributor to our distribution portfolio.ā
The NFL can re-open its media deals under an opt out provision in 2029, and 2030 for Disneyās ESPN (the league is pushing for even earlier contract redos).Ā CBSās purchase last year by Skydance triggered an early opt out there, and the league is reportedly seeking at least a $1 billion, or about a 60 percent increase.Ā Unfortunately on Paramountās earnings call this week no analyst asked a question about this issue.
Next week Fox reports its earnings. Fox CEO Lachlan Murdoch though already said on their last call Fox would ārebalanceā its sports rights portfolio if it needed to find resources to keep the NFL. Fox is viewed as the most vulnerable to the coming NFL asks because it is far smaller, and has reportedly triggered the DOJ investigation into the NFLās media practices.
Investors were bullish on Disney earnings, which saw higher than expected revenues and profit, and streaming picking up the declines in the linear business. The stock is trading up around 8 percent today, far outpacing the 1 percent rise in the Dow Jones Industrial Average. Notably Disney said it has not seen a consumer dip from higher fuel prices.
Yes, this observation was made in the context of theme parks and cruises, but it also means consumers are also buying Unlimited app subscriptions.
āOur direct-to-consumer strategy,ā the company letter to shareholders proclaimed, āis already yielding results as revenue generated by our digital subscribers in Q2 more than offset secular declines in the linear subscriber universe.ā
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