ESPN Could Be Valued as High as $24 Billion as Disney Seeks Partners for Investment
Disney wants to sell a minority stake in ESPN to one or more companies/sports leagues, and it could be in for a hefty payday when it does.
Money comes and money goes. Disney is finding that out this week, as the company agreed in principle to pay at least $8.61 billion for Comcast’s stake in Hulu on Wednesday evening. The total price could be higher once all the math is done, but either way, it’s a considerable investment on Disney’s part. Still, if Bank of America analysts are correct, Disney could be poised to recoup some of that cash in short order.
- BofA analysis suggests ESPN might be worth as much as $24 billion.
- The information will be crucial as Disney attempts to seek strategic partnerships for ESPN.
- The company could sell as much as 36% of ESPN and still retain majority control.
How Much for That ESPN in the Window?
The discussion over Hulu’s minimum valuation became so contentious that Disney and Comcast had tobring in independent investment banks to help agree on a figure. Bankers are trying to get ahead of the issue with ESPN, and a new report from Reuters shows some Wall Street analysts think Disney still has a fantastic asset on its hands, even though profits at the channel have dipped 20% this year.
The report cites a note published by Bank of America analysts led by Jessica Reif Ehrlich. They concluded that ESPN could secure an enterprise value of $24 billion, which is the number Disney would start at when determining the worth of minority stakes that it could parcel out and sell as it tries to create a direct-to-consumer streaming version of the channel.
Bank of America’s analysts say that Disney could sell as much as 36% of itself and still retain majority control, according to Reuters. Previous reports suggest that Disney only wants to sell a 10% stake in ESPN, but this gives it options, especially if other reports state the company is looking for multiple partners in the venture turn out to be accurate.
Who is Most Likely to Partner with Disney for ESPN?
The BofA note includes the usual suspects when discussing who might buy into an ESPN streaming platform. Tech companies like Amazon, Apple, and Verizon are all mentioned, as each of these companies would give Disney an instant customer base of hundreds of millions. This would help partially offset the dwindling distribution that ESPN is seeing on linear TV.
Sports leagues like the NFL and NBA are also potentially in the mix. Recent reports indicate Disney has spoken with those leagues about incorporating major programming blocs from each; the NBA could send its out-of-market games package NBA League Pass to ESPN, while the NFL may trade Disney the rights to all in-market games on NFL+ for a stake of the channel.
Discussion of ESPN’s valuation and potential partners will only increase as time goes on. Disney wants to launch its ESPN streaming service by 2025, which means that it will have to get serious with one or more of these potential allies in the next few months if it wants to meet that target date. Having an actual market valuation for the channel will help in that regard.
ESPN+
ESPN+ is a live TV streaming service that gives access to thousands of live sporting events, original shows like Peyton’s Place, the entire library of 30 for 30, E:60, The Last Dance, as well exclusive written analysis from top ESPN insiders. Sports available on ESPN+ include NFL, MLB, NHL, UFC, College Football, F1, Bundesliga, PGA Tour, La Liga, and more.