nelsonmuntz
Point Center
- Joined
- Aug 27, 2011
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Iger is not messing around. He has accelerated the Hulu buyout discussion with Comcast (20% owner of Hulu) and is now dumping ABC. ESPN has to be on the block.
If Iger is really moving this fast, then Disney had to be involved in the decision to pay to raid the Pac 12. Look at the commitment that Disney/ESPN made over the summer to raid the Pac 12:
Big 12: 7 years (2024 through 2031) of 4 schools at $24/school* = $672 million
ACC: 12 years (2024 through 2036) of 3 schools at $25/school** = $900 million
* = guess at ESPN's share of Big 12 contract
** = guess at the per school, per year average for remainder of the contract.
That is over a billion and a half dollars committed to buy the games of Utah, Arizona, Arizona State, Colorado, Cal, Stanford and SMU through 2031 or 2036. I would assume that commitments that big and that long have to be authorized at least at the CFO level, if not Iger himself. It is possible that amending an agreement that has $3 billion left on it (ACC) and whatever ESPN's remaining commitment to the Big 12 is, which has to be in the billions, might have needed Board approval.
I am a little surprised Disney went this big on tearing up the Pac 12 if it was trying to sell ESPN quick, especially because Disney must have known there was a Charter problem when they helped the Big 12 and ACC raid the Pac 12. You would have thought Disney would be against adding fixed costs to its linear platform. The first two explanations that I can think of are:
1) Iger was so worried about what Apple getting into the sports business would do to ESPN's value, that he authorized the commitment to the Big 12 and ACC, and maybe gave a nudge to the Big 10's network backers to add UCLA, USC, Washington and Oregon, just to keep Apple out.
2) Iger is worried about losing one of the pro leagues. A pro league at major risk of leaving ESPN would come up during diligence by any acquirer. A pro league leaving ESPN would put the carriage fees in serious jeopardy, and ESPN would need to have as much content as possible to offset the sting of losing one of the Big 3 (NFL, NBA, MLB).
I think it was a little of both.
If Iger is really moving this fast, then Disney had to be involved in the decision to pay to raid the Pac 12. Look at the commitment that Disney/ESPN made over the summer to raid the Pac 12:
Big 12: 7 years (2024 through 2031) of 4 schools at $24/school* = $672 million
ACC: 12 years (2024 through 2036) of 3 schools at $25/school** = $900 million
* = guess at ESPN's share of Big 12 contract
** = guess at the per school, per year average for remainder of the contract.
That is over a billion and a half dollars committed to buy the games of Utah, Arizona, Arizona State, Colorado, Cal, Stanford and SMU through 2031 or 2036. I would assume that commitments that big and that long have to be authorized at least at the CFO level, if not Iger himself. It is possible that amending an agreement that has $3 billion left on it (ACC) and whatever ESPN's remaining commitment to the Big 12 is, which has to be in the billions, might have needed Board approval.
I am a little surprised Disney went this big on tearing up the Pac 12 if it was trying to sell ESPN quick, especially because Disney must have known there was a Charter problem when they helped the Big 12 and ACC raid the Pac 12. You would have thought Disney would be against adding fixed costs to its linear platform. The first two explanations that I can think of are:
1) Iger was so worried about what Apple getting into the sports business would do to ESPN's value, that he authorized the commitment to the Big 12 and ACC, and maybe gave a nudge to the Big 10's network backers to add UCLA, USC, Washington and Oregon, just to keep Apple out.
2) Iger is worried about losing one of the pro leagues. A pro league at major risk of leaving ESPN would come up during diligence by any acquirer. A pro league leaving ESPN would put the carriage fees in serious jeopardy, and ESPN would need to have as much content as possible to offset the sting of losing one of the Big 3 (NFL, NBA, MLB).
I think it was a little of both.
