ESPN is seeking sports leagues as strategic partners: report

Walt Disney Co (NYSE: DIS) jumped late on Friday following a report that ESPN is seeking sports leagues as strategic partners.

Here’s what we know so far

The entertainment conglomerate had recently revealed interest in looking for a strategic partnership for ESPN (read more).

To that end, it has had preliminary talks with both NBA and the NFL, people familiar with the matter told CNBC today. According to a spokesperson for the National Basketball Association:

We have a longstanding relationship with Disney and look forward to continuing the discussions around the future of our partnership.

Warner Bros. Discovery and Disney have negotiating rights (exclusive) with the NBA until 2024. The Association has discussed several potential structures with Disney related to renewal of media rights, as per the CNBC report.

Possible hurdles such a deal could face

CNBC also discovered from anonymous sources that other sports leagues like the National Hockey League and the Major League Baseball may also get involved if ESPN does indeed sign a deal with NBA and NFL.

It’s noteworthy, though, that such a move may not make as much sense for sports leagues as it does for the Walt Disney Co considering they sign media rights agreements with a bunch of partners to maximise revenue.

Also, there may be concerns around objectivity of reporting since ESPN has a huge team of journalists that cover sports events. The news arrives just weeks before Disney is scheduled to report its third-quarter financial results.

At writing, its shares are down about 25% versus their year-to-date high.