Disney ESPN wants to acquire a stake in the four biggest professional sports leagues in the U.S., but it’s unclear if the latter want to accept the offer, CNBC reports.
According to sources, the National Basketball Association, known as the NBA, and Major League Baseball (MLB) have questioned partnering with ESPN if Disney’s goal is to reduce or replace payments to the leagues for rights to broadcast ESPN’s equity sports shows.
Disney executives and league officials are aware that discussions about a potential strategic partnership are still in the “idea” phase. According to sources who requested anonymity to CNBC, the talks have not had many specifics, but are likely to heat up as ESPN tries to reach a rights renewal agreement with the NBA.
And while Disney tries not to go bankrupt, the streaming division of the media giant continues to lose money.
The sports agreement seems to be one way for the company to improve its situation. Agreeing to a deal in which ESPN swaps stock for sports rights could save Disney billions of dollars to use on other strategic ventures. ESPN recently struck a deal with Penn Entertainment that will give it $1.5 billion in cash over the next 10 years.
One of the reasons the leagues haven’t confirmed Disney’s offer is because they also need the cash, especially since the regional sports network business is in jeopardy. Teams pay players largely out of sports rights fees. ESPN’s demands play a significant role in how leagues make money. Organizations can make competitive bids for packages of games because ESPN is almost always a potential buyer.
“We have a long-standing relationship with Disney and look forward to continuing discussions around the future of our partnership”, an NBA spokesman said.
According to insiders, Disney has notified the leagues that it is in separate talks with strategic investors that could provide distribution benefits.
An MLB spokesman declined to comment on the situation.