Disney’s (DIS) ESPN and Major League Baseball are splitting up after a 35-year association with the broadcaster announcing coverage of MLB games will conclude at the end of the 2025 season.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
ESPN and MLB had been in talks to restructure the deal, but these have fallen through, leading to a “mutual” separation. There had been a March 1st deadline for MLB and ESPN to opt out of the final three years of a seven-year deal agreed in 2021 that averaged $550 million per season.
ESPN Ends Long Association with MLB
ESPN has carried MLB games since 1990 but recently has cut back its coverage to 30 regular-season games. Before this, ESPN broadcast up to 90 regular-season games, while in 2017 it also stopped the “Baseball Tonight” highlights and news show.
“Unfortunately in recent years, we have seen ESPN scale back their baseball coverage and investment in a way that is not consistent with the sport’s appeal or performance on their platform,” MLB said in a statement.
MLB also counts as broadcast partners Fox (FOX) and Turner Sports (WBD), however there could be interest from the likes of Netflix (NFLX) and Amazon (AMZN) to pick up from ESPN. Last year Netflix jumped in sports with a deal to stream NFL games on Christmas Day for the next three years.
Hinting at this, MLB says it has “significant interest from both traditional media companies and streaming services who would like to obtain rights to MLB games.”
Money Talks and Walks for DIS
Change is clearly afoot in the world of sports streaming amid turmoil in the media industry that’s seeing everything from consolidation to the death of the pay TV bundle.
Firstly, sports rights costs have soared for DIS, especially after it paid billions more each year to keep the NBA, including the championship finals, and the NFL. In July Disney along with Comcast’s (CMCSA) NBC and Amazon agreed to cough up $76 billion for an 11-year deal with the NBA, which ended its long association with Turner Sports (TNT).
Meanwhile the NFL’s current 11-year deal with ESPN struck in 2021 and others is worth $111 billion. The NFL can walk away from its broadcast partners – except DIS’s ESPN – after the 2028/29 season.
But sticking with MLB proved a stretch too far. ESPN’s demand to reduce rights fees was “simply unacceptable,” said MLB.
“In making this decision, we applied the same discipline and fiscal responsibility that has built ESPN’s industry-leading live events portfolio as we continue to grow our audience across linear, digital and social platforms,” ESPN said in a statement.
DIS also recently announced a tie-up with sports streaming platform FuboTV (FUBO), and then along with FOX and WBD said it would ditch their planned Venu Sports streaming service.
Now it’s gearing up to launch its stand-alone ESPN, with CEO Bob Iger and CFO Hugh Johnston confirming on the recent earnings call that Disney is looking to bring ESPN+ and all the ESPN networks under a single flagship in early fall.
Is Disney Stock a Buy or Hold?
Wall Street analysts have a Strong Buy consensus rating on DIS stock based on 15 Buys and five Holds assigned in the past three months. After a 3.6% rally in its share price over the past year, the average DIS price target of $129.67 per share implies about 17% upside potential.
