The Walt Disney Company has been very busy lately with its property located not in Central Florida, nor in Southern California, nor even in some exotic International location, but rather in the once sleepy town known to sports fans everywhere as Bristol, Connecticut.

Just this very morning, the Entertainment and Sports Programming Network (the original meaning of the letters ESPN) announced it had signed "a landmark deal" to bring the mega events of professional wrestling giant WWE to the new direct-to-consumer (DTC) streaming service that ESPN is just about to launch. The agreement, which begins in 2026, is reported to be worth over $1.6 billion.

Leaning a bit more into the “E for Entertainment" side of the business on that one.

But that announcement comes just one day after the ESPN Chairman Jimmy Pitaro and his team in Bristol announced an even bigger “landmark deal” when it rocked the sports television world by giving up 10% of its equity to acquire the National Football League’s media assets, including the NFL Network and popular “RedZone” channel.

That transaction, which is far more in the “S for Sports” side of the business, as the NFL is far and away the most popular sport in the country. That deal is valued “in the neighborhood of" $3 billion.

Busy times in Bristol, indeed.

Those business deals were an essential part of Disney’s third-quarter financial results that were reported this morning before the markets opened on Wall Street. Make no mistake, though, the headline on the company’s revenues wasn’t ESPN or any other part of the media business but rather those folks pushing through the gates of Disney’s theme parks around the globe. Income at the theme parks grew by double digits to contribute to the $23.7 billion the company made in the period ending June 28th. Income from what Disney labels its “conventional entertainment TV” dropped by some 28% and the movie business actually suffered a loss.

So much for “The Fantastic Four” saving the “House of the Mouse."

Back to ESPN, Disney Chairman Bob Iger made it clear in this morning’s earning call that the streaming business is a key part of the future of the company, as it will rely on the two pillars of the existing Hulu platform and the new ESPN one that will launch in time for the return of football of all sorts, on August 21st. Streaming is already profitable for Disney, with the company reporting a quarterly profit of close to $350 million in that part of the business.

The new monthly ESPN streaming subscription will set sports fans back $30 a month when it launches, including all the ESPN channels from the original to Ocho and promised new interactive features. The ability to split your TV screen and watch up to four things at once is a must-have for hyperkinetic sports watchers already. We assume the ability to add live gambling data from the ESPNBET service might be forthcoming. If you’d like to add Hulu and Disney+ so the children have something to watch when you are not gambling away their college money, that will only be another $6 a month.

Those numbers explain why ESPN was typically the largest part of the programming cost of your monthly cable bill for many years.

Speaking of costs, the NFL media acquisition sheds some light on precisely what ESPN is worth these days. By our calculator, if 10% of ESPN that the NFL will own is worth $3 billion, then the whole company must be valued at about $30 billion. A reminder that Disney only owns 80% of ESPN. The other 20% is owned by Hearst, which acquired that minority position from RJR Nabisco in November of 1990. At that time, the initial purchase by Hearst was reported to be around $170 million. That would mean that the investment has grown to be worth $6 billion today.

A pretty decent return for Hearst by any measure.

Bloomberg reports that the deal to give 10% of ESPN to the NFL, in exchange for the NFL Network, RedZone, and some international games that aired exclusively on the NFL Network, was equally split between Disney and Hearst, the former giving up 8% of its share and the latter parting with just 2%. In other words, each gave up an equal 10% of their total equity in ESPN to take in the National Football League as the company’s third owner.

What this seems to set up is that Disney will probably follow the lead of Comcast and Warner Bros.-Discovery and seek to spin off ESPN in the next 12 to 18 months into a separate company. Rich Greenfield, the respected media and technology analyst at Lightshed Partners, said just that on Bloomberg TV this morning. We think he is correct with that analysis.

Greenfield included ABC in his prediction of a stand-alone entity for ESPN. Pairing the declining revenues of those “conventional entertainment TV” assets with the very profitable “Worldwide Leader in Sports” makes sense. It would allow Disney to focus on the “intellectual property” pipeline between its movie studios and theme parks. (We’d include the Disney Cruise Line as basically “floating theme parks.”) 

Just what that will mean for the Disney-owned American Broadcasting Company and its owned and operated stations is anybody’s guess. Among the guessing would surely be the affiliates of the ABC network, who have to be wondering what will happen to their sports programming, which is all under the “ESPN on ABC” umbrella, including the simulcast of Monday Night Football games that has been a bright spot in the broadcast network’s primetime schedule.

Not sure that getting axe-throwing or cornhole championships from “The Ocho” would be quite the same thing.

When we were working at ESPN in its first decade, way back in the mid-1980s, ABC Sports wanted as little to do with the nascent sports network as possible. One wonders if the opposite is the case, some forty years later.

Because we sure don’t expect the folks in Bristol to be singing “Be Our Guest” anytime soon.

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