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Disney has been swamped with potential suitors for ESPN ever since CEO Bob Iger said in July that he’s open to bringing in strategic partners.
That initiative has drawn in the likes of the NFL, NBA, and MLB, Amazon, and Verizon. But a major Wall Street analyst now argues the NFL should also be looking elsewhere in Disney’s portfolio.
Needham’s Laura Martin said the NFL should consider purchasing ABC from Disney to protect the scale-oriented broadcast television exposure that is a bedrock of the league’s economics.
“The NFL is standing by and witnessing the destruction of the linear TV ecosystem, with its powerful economics that largely flow to the NFL and other sports leagues,” Martin said. “The NFL is fiddling while Rome burns, in our view.”
Disney’s ongoing reconsideration of its media assets involves all of its linear networks, including ABC.
Partly referencing the collapse of the regional sports network business and Diamond Sports Group’s ongoing bankruptcy, Martin also predicts a sharp winnowing of potential suitors in the NFL’s next round of domestic rights in 2033, perhaps only to Amazon.
“Content without distribution is worthless, no matter how good,” she said.
In the meantime, the NFL continues to draw banner ratings across its domestic partners.
Activist Shareholder Returns
Eight months after abandoning his proxy fight against Disney, activist investor Nelson Peltz has reignited his pressure on the company. Now holding a Disney stake worth about $2.5 billion through his Trian Fund Management, Peltz is pursuing multiple board seats, including one for himself.
If successful, Peltz could significantly influence the company’s sale of equity in assets such as ESPN and ABC. Peltz’s efforts arrive as Disney stock hit a nine-year low last week.
