Talks are heating up between the Walt Disney Co. and the NFL and NBA about taking an equity stake in ESPN, sources tell Front Office Sports.

With Disney under pressure from Wall Street to improve results, the entertainment giant increasingly views a deal with the two sports leagues as its best option, said sources. 

Analysts say no deal has been signed, and the playing field remains wide open.

In other words, don’t count out private equity investors or technology giants swooping in for a piece of the most famous four letters in sports.

Wrote analyst Jessica Reif Cohen in a research note: “In our view, [ESPN] buyers could be comprised of three different groups including 1) the major sports leagues (e.g., NBA/NFL), 2) technology partners (e.g., Amazon/Apple/Google) and 3) distribution partners (e.g., Comcast/Verizon).”

There’s also experts who believe giant streamers like Apple can land a massive portfolio of live sports rights by simply buying ESPN. “Apple has enough change in their couch cushions to fundamentally alter the media rights landscape,” author James Andrew Miller recently noted to FOS.

Still, a deal with the NFL or NBA makes financial sense. 

The four entities – Disney, ESPN, the NFL, and the NBA – are already billion-dollar business partners. 

Disney’s ESPN is paying the NFL $2.7 billion annually for “Monday Night Football” rights through 2033. The sports media giant will air its first two Super Bowls after the 2026 and 2030 seasons. Chairman Jimmy Pitaro has vastly improved the formerly frosty relationship between ESPN and the NFL.

Meanwhile, ESPN just tipped off negotiations to retain media rights to the NBA – including exclusive coverage of the NBA Finals – into the 2030s and beyond. 

ESPN’s now at the tail end of a $1.4 billion, 9-year deal with the NBA that expires after the 2024-2025 season.

While he’s stated he’s not going anywhere, NBA Commissioner Adam Silver is on the “short list” of candidates to succeed Disney chairman Bob Iger when he steps down, according to Charles Gasparino of Fox Business.

Disney and ESPN are also intrigued by the possibility of securing more exclusive content from sports leagues. 

As with other TV networks, ESPN has been pushing leagues for more access to coaches and players for years. 

ESPN succeeded with Major League Baseball, with the formerly conservative league allowing mic ’d-up players to conduct live interviews during games. MLB’s another potential investor.

“Disney executives have spoken with a number of sports leagues, including the N.B.A., about selling them equity in ESPN and what the company would want out of such an arrangement,” reported the New York Times. “According to one of the people, the benefits sought by ESPN in a partnership could include more closely integrating a league’s social media operations with the network’s, content like documentary rights and more in-game audio from players, distributing games it does not have the broadcast rights to within its apps and working together on marketing.”

Don’t forget the NFL has also been exploring strategic options for NFL Media (which includes NFL Network, NFL RedZone, and NFL.com) since 2021.

Like Disney/ESPN, the league wants to maintain control of NFL Media by selling minority stakes to investors. 

According to CNBC, media czar Brian Rolapp informed league presidents the NFL hired Goldman Sachs to “identify and evaluate partnership opportunities for NFL Media with the goal of creating an even more dynamic media asset that extends reach and engagement and creates additional value for the clubs – including through direct-to-consumer opportunities, new and innovative content and formats, and international expansion.”

On the other hand, the NFL and NBA could generate resentment among other media partners if they buy an equity stake in ESPN. The leagues would be hard-pressed to explain to companies such as NBC Universal and Warner Bros. Discovery Sports how they’d avoid favoring ESPN if they own a piece of the network. 

Wall Street analysts peg ESPN’s worth between $25 billion and $30 billion.

Disney recently broke out ESPN’s separately for the first time. During its last fiscal year, ESPN generated annual revenue of $16 billion and profits of $2.9 billion.

All eyes will be on Disney today as the Mouse House releases fourth quarter and full-year financial results.

Iger’s expected to address whether he will sell all or part of ESPN and the rest of the company’s linear TV networks like ABC.