ESPN to acquire NFL Network, RedZone for 10% equity stake

NEW YORK - ESPN, a subsidiary of The Walt Disney Company (NYSE:DIS), has reached a non-binding agreement to acquire NFL Network and other media assets from the National Football League in exchange for a 10% equity stake in ESPN. Disney, currently valued at $213.45 billion and showing strong financial health according to InvestingPro metrics, has seen its stock surge 32.66% over the past year.

Under the proposed deal announced Wednesday, ESPN would take ownership of NFL Network, NFL’s linear RedZone Channel, and NFL Fantasy. The transaction would also include a licensing agreement for ESPN to use certain NFL content and intellectual property.

ESPN plans to fully integrate NFL Network into its upcoming direct-to-consumer streaming service while maintaining traditional pay television distribution. The company will also distribute the NFL RedZone Channel to pay TV operators for inclusion in sports packages.

The agreement would merge NFL Fantasy Football with ESPN Fantasy Football to create what the companies describe as "the official Fantasy season-long game of the NFL."

As part of the arrangement, ESPN’s platforms will license an additional three NFL games per season to air on NFL Network, while four games will shift from ESPN to NFL Network, which will continue to present seven games per season.

The NFL will retain ownership of NFL Films and fan platforms including NFL+, NFL.com, the NFL Podcast Network, the NFL FAST Channel, and the official sites for the league’s 32 clubs. The league will also continue to own, operate, and produce NFL RedZone, while maintaining rights to distribute it digitally.

"This is an exciting day for sports fans," said Jimmy Pitaro, Chairman of ESPN. "By combining these NFL media assets with ESPN’s reach and innovation, we’re creating a premier destination for football fans." The deal comes as Disney demonstrates solid operational performance, generating $94.04 billion in revenue and $19.12 billion in EBITDA over the last twelve months.

The transactions remain subject to negotiation of definitive agreements, approval by NFL team owners, and other customary closing conditions.

The information is based on a press release statement issued by the companies.

In other recent news, Walt Disney has been the focus of several developments. Morgan Stanley has increased its price target for Disney to $140, citing potential for significant earnings per share growth if economic conditions remain favorable. Similarly, JPMorgan has raised its price target to $138, anticipating a slight increase in Disney’s segment operating income for the upcoming fiscal third quarter. In a separate development, the National Football League is reportedly in talks to acquire a 10% stake in ESPN, which could result in ESPN gaining full ownership of NFL Network and NFL RedZone. This potential deal would involve the NFL exchanging some of its media assets for the ownership stake. Meanwhile, Netflix has started using artificial intelligence video generation software from Runway AI for its content production, a move that has sparked discussions in Hollywood about AI’s impact on industry jobs. These developments highlight significant strategic shifts and market evaluations for both Disney and Netflix.

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