In what was likely his final earnings call as CEO of Disney, Bob Iger made it clear what he didn’t want to discuss: the NFL. And yet, it was impossible to ignore.
Last week, Disney’s acquisition of NFL Media, including NFL Network and RedZone, officially closed. In return, the NFL received a 10% stake in ESPN. This deal marks a historic first. The most powerful sports league in the country now owns a piece of one of its major media partners. That’s not just unusual. It’s unprecedented.
When asked directly how this corporate tie-up might affect ESPN’s relationship with the league, including the potential for an early renewal of media rights, Iger refused to elaborate. “I’m not going to comment at all about the future of the ESPN relationship with the NFL,” he said. “I think it’s just premature to speculate what might happen at that point.” Instead, he focused on short-term gains such as the added NFL inventory, ESPN’s first Super Bowl, and the ability to incorporate NFL Network and RedZone into ESPN’s growing streaming footprint.
What Iger did not address were the questions now dominating the conversation around this deal. Does ESPN now have a guaranteed future with the NFL? Will its editorial tone shift to mirror the NFL’s own network? Has this deal eroded ESPN’s independence or leverage at the negotiation table?
While some have speculated this opens the door for the NFL to cut similar equity-for-media deals with other broadcasters, that scenario appears unlikely. The league had unique assets in NFL Network and RedZone that made the ESPN deal possible. There is no other comparable package sitting on the shelf. More importantly, the NFL thrives on having multiple bidders compete for game packages. If it took a stake in Fox, for example, that Sunday afternoon slot would no longer be up for grabs. The league’s entire media strategy is built on competition, driving up value.
Aside from the NFL situation, the earnings call revealed a few notable updates across Disney’s media business. First, ESPN took a $110 million hit from its blackout on YouTube TV last year. That blackout led to a decline in profit margins for the sports division, which slipped below 4%, down from more than 5% in the same quarter last year.
Second, Disney’s direct-to-consumer play for ESPN is officially live. The company quietly launched its new streaming product, ESPN Unlimited, last summer. Iger noted strong engagement and rising digital subscription fees, but Disney has chosen not to disclose the number of sign-ups so far.
Third, the streaming business overall appears to be stabilizing. Just two years ago, legacy media companies were bleeding billions trying to build streaming platforms. Disney, through a combination of price increases and content cost reductions, has started to rein in those losses. Iger suggested the company is now positioned for accelerated growth in the streaming space, supported by tech enhancements and improved content strategies.
That’s in sharp contrast with Comcast’s Peacock. While Disney’s losses are shrinking, Comcast reported that Peacock posted a $552 million loss last quarter. While Disney benefits from a broader streaming portfolio that includes ESPN, Hulu, Disney Plus, and Fubo, Comcast’s streaming numbers reflect only Peacock, making the comparison increasingly lopsided.
Lastly, the question of who will succeed Iger looms over the company’s next phase. Josh D’Amaro, who currently runs Disney’s Parks division, is seen as the frontrunner. If he gets the job, Wall Street will be quick to probe how well-prepared he is to steer Disney’s massive entertainment and sports operations. The other leading candidate is Dana Walden, co-chair of Disney Entertainment, who would be viewed as a more seamless fit on the content side.
This earnings report was less about Disney’s financial performance than about the strategic position it’s carving out in sports, media, and streaming. The NFL deal is significant, even if Iger isn’t ready to talk about where it leads.
