Is it a good or a bad thing to invest in sports events in the core media?

"This is one of the most important things ESPN has done since 1987."

At the latest financial report meeting, Disney CEO Bob Iger set the tone for a deal.

Last week, ESPN announced it would acquire several NFL media assets, including cable rights on NFL Network, RedZone, and NFL Fantasy, which will acquire 10% of ESPN.

If we use ESPN's current estimated market value of $25 billion to $30 billion, the value of this transaction will reach between $2.5-3 billion. After the transaction is concluded, on the one hand, ESPN will take over and operate NFL Network, RedZone channel (cable TV interest) and NFL Fantesey businesses, and merge the latter with its own football Fantesey products; on the other hand, NFL will authorize ESPN a series of content assets, including seven games broadcast by NFL Network.

Source: ESPN

Another year mentioned by Eiger - 1987, is not just a casual statement. That year was the year when ESPN's last "destiny turned". They won the NFL broadcasting rights for the first time, knocking on the door to mainstream American sports.

Now, facing the challenges of the traditional revenue model and the pressure of streaming transformation, ESPN has once again pressed its biggest bargaining chip on the NFL. After all, many things have changed over the past 38 years, but one iron rule has not changed:

Just want to make sports money in the United States and get the content of the NFL. In 1978, a man named Bill Rasmussen was unemployed.

Previously, he was the communication director and commentator of the World Hockey Association New England Whales. But because the team did not make the playoffs, many management staff, including Rasmussen, were fired. That day, he originally planned to participate in a program recording, and then called the producer to tell the producer that he had been fired. The latter still advised him to come and record the program, and the two of them had an idea on the spot.

Rasmussen has always been dissatisfied with the "three-minute limit" of the sports sector in the evening news: almost only local professional teams are reported, and university sports and out-of-town events are ignored. He tried to do a weekly half-hour highlight, but he died soon due to lack of support. So he had the idea: Is it possible to make a cable channel that specializes in sports broadcasting?

Bill Rasmussen Source: ESPN

At that time, cable TV was in its infancy, and satellite transmission was a brand new means of content distribution. Rasmussen found that renting a satellite signal for 24 hours is more cost-effective than renting a satellite for 5 hours alone. So he simply imagined the channel as broadcast 24 hours a day, and Entertainment and Sports Programming Network, Inc. (ESP Network) was established.

The company mistakenly wrote the name as "ESPN" when printing the letter paper, and this name was used.

Bill and his team initially rented an office in Plainville, but were in trouble with regulations prohibiting the installation of antennas on the roof. Finally, they found an abandoned garbage dump in Bristol not far away - the land price is low and empty, just in time for the antenna to be established.

It is worth mentioning that ESPN's headquarters is still there to date.

In the early stages of its establishment, funding was the biggest obstacle. On February 22, 1979, Getty Oil acquired 85% of its shares to invest in the construction of studios and land purchases - although this money made the company's business more reliable, the outside world is still full of doubts: Who would watch sports 24 hours a day?

Victory belongs to the brave. Beer giant Anheuser-Busch, despite doubts, spent more than $1 million in advertising fees, becoming ESPN's first big sponsor. It not only set the largest single advertising sponsor in cable TV history at that time, but also gave ESPN the confidence to operate.

On September 7, 1979, ESPN started broadcasting. The first program was "SportsCenter", which later became the signature. The signal was transmitted to the TVs of nearly 1.4 million cable users across the United States.

"If you are a sports fan, the scene you see in the next few minutes, hours, and even in the next few days may make you feel like you are in a sports paradise. Beyond that blue horizon, there is an infinitely vast world of sports, and at this moment, you are standing on the edge of the future. ESPN, this comprehensive sports cable network that is broadcast 24 hours a day, 7 days a week, will bring you 24 hours of uninterrupted sports programs."

This is the first sentence host Lee Leonard said in this program.

That year, the total number of cable TV users in the United States was only 20 million. No one could have thought that this small company built on a garbage dump would change the landscape of American sports media in the next few decades.

Source: ESPN

In 1984, ABC acquired 85% of ESPN's shares for US$188 million. Then in May 1985, ABC was acquired by Capital City Communications for US$3.5 billion, and the integration was completed in early 1986.

Two consecutive rounds of capital operation have not only obtained strong capital injection, but also ushered in system upgrades in program production, distribution network and management experience, laying the foundation for expansion.

1987 was a watershed for ESPN - ESPN, which was established for only eight years, won the broadcast rights of the NFL eight games per season for the first time..

Previously, ESPN's live broadcast copyright was mainly concentrated on relatively unpopular projects, such as slow softball, NCAA first round, Australian rugby, etc. After taking over the NFL copyright, ESPN successfully squeezed into the card table of mainstream American sports.

Regarding the influence of the NFL in the United States, we don’t need to repeat it. We just need to remember a joke: "The first class at Harvard Business School teaches 'If you want to make money in the United States, you can find a way to broadcast an NFL game.'"

Source: ESPN

To a large extent, this contract has changed ESPN in all aspects: the brand has gone from "second-rate" to the front line, the content has won the most top gold events, and the subscription fees and advertising fees have risen in commercial terms.

Since 1987, the name of ESPN has truly entered mainstream culture.

As Paul Taliab, former NFL president, later said, "ESPN not only changed the way football is spread, but also changed the way Americans view football."

ESPN's first NFL live broadcast Picture source: ESPN

In 1995, Disney acquired ABC for $19 billion, and then acquired 80% of ESPN's equity. In this way, ESPN officially became a member of the Mickey Mouse Empire, and continued to grow until it became the "No. 1 Sports Media". After the peak, the story begins to turn.

In 2011, ESPN's subscription users exceeded 100 million. At that time, Cable TV in the United States was firmly in the center of family entertainment. ESPN had mainstream copyrights such as NFL Monday Night Game, NBA prime time, college football, MLB, and all-weather ace program "SportsCenter", forming an "unwind-out" sports content empire.

But the wheel of history rolls forward.

In the mid-2010s, with the popularization of the Internet and the rise of streaming media, the viewing habits of the American TV industry began to change, and the "line cutting wave" of cable TV began to rise.

This is a double blow for ESPN. On the one hand, subscriber churn has weakened the bargaining chips with cable TV operators, subscription fees are difficult to increase, and advertising revenue has also declined. According to Nelson data, by the end of 2024, the number of ESPN cable TV subscribers had dropped to 65.3 million, a significant decline from its peak period; according to Disney's Q3 2025 financial report, the revenue of sports business with ESPN as the core fell by 5% year-on-year to US$4.3 billion.

On the other hand, the prices of top sports copyrights continue to soar, with little room for compression. Take the NFL as an example. They signed a 11-year, $110 billion copyright contract in 2021, and ESPN has to pay $2.7 billion a year.

Source: Variety

Of course, ESPN is not without reaction - in 2018, they launched the streaming service ESPN+, hoping to set up another track outside of cable, but the core resources are still in the hands of cable channels, and ESPN+ has never become the main battlefield.

By the fourth quarter of 2024, although the platform has 24.9 million subscribers, it has always been difficult to enter the discussion of mainstream sports media, and the reputation of fans is also mediocre. Under the continuous impact of the environment, ESPN has taken the biggest step in its 45 years of establishment - launching a new DTC flagship product, connecting cable TV channels with streaming media for the first time. This is an unprecedented shift in scale and also means strategic adjustment.

Standing at the intersection, they once again pressed their chips toward the familiar name - NFL.

Back to the deal at the beginning of the article, the seeds of the story were actually planted more than ten years ago.

When the previous CEO John Skipper was in power, ESPN and the NFL had a similar idea of exchanging equity and media assets. Starting from 2021, this idea has been put on the table again and entered an acceleration phase driven by new CEO Jimmy Pitaro.

To verify the feasibility of the transaction, ESPN hired Goldman Sachs Group to initiate a formal strategic and financial assessment.

After those four years, the transaction finally came to an end, and the two parties broke out of a simple copyright transaction and completed a more in-depth "shareholding-style" cooperation.

It is worth mentioning that after this transaction, Disney's shareholding in ESPN dropped from 80% to 72%.

Source: ESPN

From a strategic perspective, this transaction has at least two great value to ESPN. First, the number of NFL broadcast games has increased.

After this transaction is approved by regulatory authorities, ESPN will obtain more NFL game broadcast rights, and the exclusive window (only the ESPN platform broadcasts the game at the same time) has increased from 22 games to 28 games, providing the most core content for DTC products - one more NFL game means more stable revenue.

The second is to extend existing brands and create new products. After the transaction, ESPN obtained the right to use the "RedZone" brand. RedZone is one of the most popular content products in the NFL. The basic principle is to broadcast the essence of multiple games at the same time, so that fans will hardly miss any critical moments.

Now with brand authorization, ESPN can extend the RedZone model to other projects, such as college football, NBA, etc., opening up new sources of revenue.

Source: NFL RedZone

For the NFL, this is also a strategic upgrade. The alliance retains the NFL+ streaming platform, and at the same time, through ESPN's distribution network and production capabilities, expands the influence of NFL Network and RedZone and reduces the investment pressure of self-operated channels..

More importantly, equity binding means that the NFL will benefit directly from ESPN's growth, which is somewhat more long-term rewarding than simply increasing copyright fees.

In the long run, this transaction is not only a big bet for ESPN during the critical period of transformation, but also a "structural" adjustment of North American sports copyright.

In the past six months, two similar alliance + media equity cooperation have occurred - MLB has acquired a stake in Jomboy Media, while Fox has acquired 33% of Indycar's parent company. In the changing media and copyright environment, alliances and media are seeking new ways of cooperation to enhance symbiotic relations through equity-based cooperation.

However, this kind of deep binding has also caused considerable concerns.

The credibility of media is generally under pressure worldwide. Alliances invest in media or media deeply rely on alliance models, which may further damage the objectivity of reports, making these media companies a mouthpiece to some extent, or the alliance provides them with additional "privileges".

Perhaps, we are standing at a critical juncture in the reshaping of the relationship between the event and the media.