ESPN Chief Jimmy Pitaro on How the NBA Deal Fits Into Disney’s Streaming Strategy

The next year will be a critical one for ESPN. The Disney-owned sports media giant will launch the Venu streaming bundle with Fox and Warner Bros. Discovery ahead of the NFL season, and next year is planning its “Flagship” streaming service, which will bring all of ESPN’s live and library programming to streaming.

Disney’s just-signed $2.6 billion per year rights deal is at the heart of that streaming strategy, as Disney’s chairman of ESPN and sports content told reporters on a conference call Wednesday shortly after the deal was announced.

“The great thing about this negotiation with with the NBA and WNBA was that we were completely aligned in terms of prioritizing digital and prioritizing streaming,” Pitaro said. “So, yes, the linear television business remains important to us. It has been important, it will continue to be important to us, but at the same time, we’re running parallel paths here, we’re significantly invested in streaming.”

“Because, again, they they understand that this is where our audience is migrating to these direct-to-consumer platforms, and so we we need to be there at the same time cable and broadcast are still important to the NBA and the WNBA,” he added, noting that the deal also gives expanded rights like the ability to simulcast games on multiple platforms (like Disney+), or allowing for alternate broadcasts similar to its NFL Manningcast.

He also addressed the significance of expanding ESPN’s WNBA rights.

“The league has been a priority for ESPN for for decades, and we take a lot of pride in in how much we’ve invested in the league,” Pitaro said. “We love to see the current momentum, especially coming out of the recent All Star Game — I’m sure you saw the ratings, but close to 3.5 million viewers — we maintain rights to the All Star Game going forward for all 11 years of the new deal, but keeping the WNBA as a part of this deal was critical for us.”

“We have WNBA finals exclusively on our platforms for five of the 11 seasons [NBC Sports and Prime Video will also get some WNBA Finals], we are the exclusive home for the WNBA All Star Game for all 11 years of the deal, we’re the exclusive home of the WNBA draft for all 11 years,” he added. “We’re looking at a rising tide right now, where we’re seeing our competitors in the industry really get behind women’s sports in general and behind the WNBA, and that’s a good thing.”

And he addressed ESPN’s approach to rights deals, a particularly relevant question given the premium price tag the company is paying for the NBA and WNBA.

“We continue to be disciplined, and yes, we’ve made some key acquisitions over the past few years, many in fact, but we’ve also parted ways with some key partners, for example, the Big 10,” Pitaro said. “We have not acquired rights to certain other marquee properties, despite being at the table, for example, [NFL] Sunday Ticket, Major League Soccer, there are plenty of examples here.”

“We have a very sophisticated strategy team, and we we look at each deal, and evaluate it from an affiliate sales perspective, an ad sales perspective, and for us to close the deal, we need to believe that it’s going to make sense for our business,” he continued. “There are many examples of us coming to the conclusion that the deal does make sense, for example, NBA and WNBA, but there are other examples where we’ve unfortunately had to either part ways or not increase our bid to the point where we would need to to acquire the rights, and that’s okay. We know that we can have everything, and we’ve made that very clear publicly, that we do not, and we cannot have rights to all live events, but we do believe that we bring a ton of value, as I mentioned before, to our lead partners, from a production perspective, from a megaphone perspective, in terms of our studio programming, seven days a week, in terms of our digital offerings, in terms of our social offerings, all of which is up and to the right in terms of our cross-platform offerings.”