Verizon Has Talked With Disney About ESPN Partnership
isney CEO Bob Iger has said he’s looking for strategic partners to help launch a streaming version of the ESPN cable channel. One key distributor, Verizon, has already thrown its hat into the ring.
The telecom giant has been in touch with Disney about potentially partnering on a new ESPN streaming service, according to people familiar with the matter. Verizon CEO Hans Vestberg has made no secret of his openness to such an arrangement. He told executives at sports leagues and teams about his interest in partnering with Disney on the distribution of a streaming version of ESPN earlier this summer, according to a person with direct knowledge of the matter.
THE TAKEAWAY
• Verizon is interested in partnering with Disney on ESPN streaming
• Disney wants partners to help with distribution and marketing
• Verizon is adding streaming bundles to help attract customers
• Verizon is interested in partnering with Disney on ESPN streaming
• Disney wants partners to help with distribution and marketing
• Verizon is adding streaming bundles to help attract customers
That suggests Verizon could offer a streaming verson of the full ESPN channel to its nearly 100 million wireless subscribers as part of their wireless service, jumpstarting the new service's distribution.
Verizon’s interest is good news for Iger, who faces an uphill battle in reshaping Disney, which is grappling with declining TV subscribers and falling ad revenue in traditional TV, as well as losses and slowing growth in streaming. Iger has dropped hints that Disney is looking to sell its traditional TV networks, such as ABC, although he has emphasized that sports remains key to its future.
Iger has said he wants to retain control of ESPN. But as he told analysts last week, Disney was looking for partners that could help with “distribution, technology, marketing, and content opportunities” as it shifts ESPN from a cable channel to a streaming service. Iger added that Disney had “received notable interest from many different entities.” (Disney already has a streaming version of ESPN called ESPN+ which offers live games from the NHL, the Spanish pro soccer league La Liga, golf and other sports, but not marquee sports broadcasts, such as the NFL, NBA and national college football broadcasts, unless the user has already signed up for a pay-TV subscription.)
Spokespeople for Verizon and ESPN declined to comment.
Verizon was an early partner of Disney’s streaming services, offering Disney+ to its cellular customers and some of its cable customers free for a year when the service launched in 2019. It still offers the Disney streaming bundle of Disney+, Hulu and ESPN+ with its wireless service at a discounted price, along with several other streaming services. People close to the situation noted that as a result of these existing arrangements, Disney and Verizon executives are regularly in discussions.
Growth in the wireless market has stalled in recent years, and Verizon’s subscriber growth has flatlined even as rival firm T-Mobile, which has been more aggressive on discounting and building out its 5G network, has taken market share. Intense competition between wireless services has made add-on services like streaming more important as a way to attract consumers.
Verizon has struck distribution deals with various streaming services, including a recent announcement that it will offer YouTube’s NFL Sunday Ticket service for free to some new and existing wireless and internet customers ahead of the coming football season. In June, it launched a new package for wireless customers that included Netflix and Paramount+—the first time the two services have been bundled together—at a discounted price.
Top American sports leagues—the NFL, NBA and MLB—have also held talks with Disney about potential partnerships, according to people familiar with the matter. News of the leagues’ talks with Disney was first reported by CNBC. The talks are still in the early stages and the results could take many shapes: For instance, the leagues could provide more content to ESPN, said the people.