Broadcasting With Benefits: Networks Gaining League Equity Is Now the Norm

Billion-dollar sports leagues and their media partners like to refer to each other as “partners,” despite buyers and sellers being more accurate descriptions. But there’s a new trend reshaping their longtime relationships. Namely, media partners taking equity stakes in the leagues they televise and cover.

On Wednesday, Disney-owned ESPN and the Premier Lacrosse League announced a five-year extension of their current rights deal starting with the 2026 season. But the most interesting wrinkle was their joint statement that ESPN was making a “minority equity investment” in the PLL. That’s no outlier. It’s part of a growing trend of leagues and media partners forging true financial relationships. Consider:

• Both ESPN and PLL declined to comment on the size of ESPN’s investment. But CNBC reports it will likely give the four letters a 3% stake in the fast-growing PLL. “ESPN are not only experts in their understanding of sports fans, but they are also great predictors of audience and growth,” PLL cofounder and president Paul Rabil told CNBC. “It’s validating that they came in to invest in what we’re building, and then as a partner, in addition to the expansion of coverage that they’ll be giving.”
• When Warner Bros. Discovery’s TNT Sports reached a multiyear media deal with Unrivaled last October, it also revealed an undisclosed equity stake in the new 3-on-3 women’s basketball league. 
• Besides broadcasting UFL spring football games, Fox Sports owns half of the eight-team league. The other half is owned by Dwayne “The Rock” Johnson, former XFL chair Dany Garcia, and RedBird Capital Partners. (RedBird IMI is also an investor in Front Office Sports.)
• In what could be the grandaddy of all network-to-league equity deals, Disney is closing in on a deal to acquire NFL Media from the NFL in exchange for an equity stake in ESPN. Among other things, the deal would give ESPN the rights to the highly addictive NFL RedZone with Scott Hanson.

What’s going on? Both leagues and networks are starting to see these deals as win-win propositions, experts tell me.

If smaller leagues like the PLL and UFL give their media partners an ownership slice, they’re more likely to get coverage and attention on a major sports network such as ESPN or Fox. Just ask the NHL. 

Pro hockey was breaking through into the mainstream during its first run on ESPN from 1992 to 2004. But when the NHL left ESPN, ESPN dropped almost all coverage. Now the two have a relationship again—and viewers are seeing not only games but also analysis from commentators such as Mark Messier and P.K. Subban.  

Boasting an ownership partnership with an established network like ESPN, Fox, or TNT also gives start-up leagues instant credibility with corporate sponsors on Madison Avenue. 

For networks like ESPN, it’s about “owning the means of production,” says Eric Jackson, president of the tech-focused hedge fund EMJ Capital. 

Getting into bed financially with league partners gives networks more of a say on the cost of their media-rights fees. It helps guard them against being outbid for those rights by competitors—and a guaranteed stream of content for their channels. They also get a chance to actually capitalize on the financial success if a league like the PLL explodes in popularity.

“What is a sports media company like ESPN these days? Do they own the viewers? Do they own the leagues? They are passing through a lot of the value from the viewers to the players and leagues, but seeing their share shrink over time. And there is no loyalty anymore from the viewers to the channels like there used to be,” Jackson told me. “People are learning how to stream an NFL game on Peacock. So why should they care about ESPN? These investments are small ways of the channels keeping a toehold on these leagues—and rights to broadcast them in the future.”

One more thing on ESPN and the deal for NFL Media: Taking the league’s media operation off its hands should give ESPN leverage when The Shield renegotiates its media deals—and more protection if a streamer tries to steal away Monday Night Football. Would WBD have lost U.S. media rights to the NBA in the U.S. if it were an equity partner with the league? We’ll never know. But it would not have hurt.