Disney's ESPN to acquire NFL media assets in major deal

By Dawn Chmielewski and Lisa Richwine

LOS ANGELES, Aug 5 (Reuters) - Walt Disney's DIS.N ESPN has reached a landmark deal with the National Football League to acquire NFL Network and other media assets from the league in exchange for the NFL taking a 10% equity stake in the sports network, the parties said on Tuesday.

The deal, which ESPN said would bolster the offerings on its upcoming ESPN streaming service, is subject to regulatory approval and no value was provided.

Analysts and industry insiders estimated the NFL's stake in ESPN could be worth $2 billion to $3 billion, though the companies declined to comment.

"Tough to estimate a value except that it's in the multi-billions," said Bob Dorfman, a sports marketing analyst in San Francisco. "The NFL seems to have no ceiling on growth and value; with all the content beyond the actual games, it's become a year-round sport. And it's only going to grow internationally."

ESPN also will acquire NFL Fantasy, a digital offering, and will gain the rights to distribute the NFL RedZone television channel to its cable and satellite television customers.

"Today's announcement paves the way for the world's leading sports media brand and America's most popular sport to deliver an even more compelling experience for NFL fans, in a way that only ESPN and Disney can," Disney CEO Robert Iger said in a statement.

The ESPN streaming service, which Iger has said could launch as early as this month, will cost $29.99 per month. It will provide access to ESPN's portfolio of professional and college sports, including the NFL, the NBA and WNBA, MLB and the NCAA Women's Basketball Championship, as well as studio shows such as "SportsCenter" and "Pardon the Interruption."

"By combining these NFL media assets with ESPN’s reach and innovation, we’re creating a premier destination for football fans," ESPN Chairman Jimmy Pitaro said in a statement.

The league launched the NFL Network in 2003, as it sought to tap into the revenue generated by cable and satellite subscriptions. While it gained traction, introducing Thursday Night Football, it never rose to become a rival to ESPN.

Under the new agreement, ESPN would own and operate the TV and streaming rights to the NFL Network, which will continue to carry seven games a year.

"The network's sale to ESPN will build on this remarkable legacy, providing more NFL football for more fans in new and innovative ways," said NFL Commissioner Roger Goodell.

RedZone is a service that allows fans to watch scoring opportunities during Sunday afternoon NFL games.

The league will continue to own, operate, and produce NFL RedZone and retain rights to distribute it digitally. The league also will retain ownership of certain media properties, such as NFL Films, and platforms such as the NFL Podcast Network and NFL+.