Disney’s ESPN to acquire NFL media assets

Walt Disney’s (NYSE:DIS) ESPN has reached a non-binding deal with the National Football League (NFL) to acquire key NFL media assets, including NFL Network, NFL’s linear RedZone Channel, and NFL Fantasy — in exchange for the league receiving a 10% equity stake in ESPN.

The move is aimed at strengthening content offerings for ESPN’s upcoming direct-to-consumer streaming platform.

Financial terms were not disclosed, and the transaction is subject to regulatory approval. The Athletic, which first reported on the potential deal last week, cited sources suggesting it could be worth billions of dollars.

In addition to the sale of NFL Network, the NFL and ESPN are also entering into a second non-binding agreement, under which the NFL will license to ESPN certain NFL content and other intellectual property to be used by NFL Network and other assets.

“Today’s announcement paves the way for the world’s leading sports media brand and America’s most popular sport to deliver an even more compelling experience for NFL fans, in a way that only ESPN and Disney can,” Disney CEO Robert Iger said in a statement.

“By combining these NFL media assets with ESPN’s reach and innovation, we’re creating a premier destination for football fans,” ESPN Chairman Jimmy Pitaro said in a statement.

Under the deal, ESPN will take over ownership and operations of NFL Network and fully integrate it into its streaming and pay-TV platforms. It will also gain broad rights to the RedZone brand, distribute the RedZone Channel to pay TV providers, and merge NFL Fantasy with ESPN Fantasy to create the NFL’s official season-long fantasy game.

In total, ESPN’s platforms will license three additional NFL games per season to air on NFL Network and shift four games from its schedule to NFL Network, which will continue airing seven games each season.