ESPN, every mention

Disney: The Renaissance and the Empire · Acquired Aug 10, 2026 · 100 mentions

• ▶ 1:54 Ben Gilbert It is, of course, ESPN.
• ▶ 2:33 Ben Gilbert And ESPN making giant technology and marketing investments to support that transition that lost billions for half a decade.
• ▶ 2:59 Ben Gilbert So those fat profits from cable channels like ESPN
• ▶ 1:06:08 David Rosenthal The entertainment and sports programming network, better known as ESPN.
• ▶ 1:06:16 David Rosenthal The history of ESPN is like completely crazy on its own.
• ▶ 1:06:24 David Rosenthal After it was founded, when it was still a startup, Texaco then acquired Getty, sold off ESPN to ABC.
• ▶ 1:06:34 David Rosenthal ABC wanted a financial partner for the deal, so they bring in Nabisco, like Nabisco as a 20% minority partner in ESPN.
• ▶ 1:07:07 David Rosenthal As part of that, they sell off this 20% ESPN minority stake to the Hearst Corporation, which still owns it.
• ▶ 1:07:17 David Rosenthal And Hearst, over the ensuing like four decades, just gets billions and billions of dollars of free cash flow out of ESPN.
• ▶ 1:07:31 David Rosenthal But yeah, ESPN became this juggernaut, and they actually invented a whole second revenue line for cable networks in addition to advertising.
• ▶ 1:08:03 Ben Gilbert And pre-ESPN, that was the whole business model.
• ▶ 1:08:16 Ben Gilbert And ESPN sort of realizes, like, they were buying
• ▶ 1:08:37 David Rosenthal That may have been how it started, but pretty quickly, though, ESPN and then within ABC, once ABC owns it, they realized that sports rights are
• ▶ 1:08:48 David Rosenthal The biggest point of leverage that they could possibly have over the cable operators because all ESPN has to do is threaten to pull the plug on any given cable operator and say to, you know, their thousands or millions of subscribers out…
• ▶ 1:09:18 David Rosenthal Sorry, we're in a carriage dispute with ESPN.
• ▶ 1:09:37 David Rosenthal And so once ESPN figures out this business model,
• ▶ 1:09:43 David Rosenthal At first, Ben, like you said, they get the cable operators to pay them a few cents per subscriber that gets the ESPN channel, and it goes up to a dollar, then two dollars a month, and then five dollars a month.
• ▶ 1:09:57 David Rosenthal Do you know what ESPN's current affiliate fee average deal is per month with pay TV operators?
• ▶ 1:10:14 David Rosenthal Nine dollars and 42 cents per month per subscriber that the cable operators pay ESPN.
• ▶ 1:10:21 David Rosenthal This is billions and billions and billions of highly predictable cash money dollars flowing into ESPN.
• ▶ 1:10:41 Ben Gilbert And ESPN is very aware of that value that they provide to the bundle.
• ▶ 1:10:49 David Rosenthal So, back to the Disney Cap City's ABC deal here in 1995, I don't think,
• ▶ 1:11:06 David Rosenthal At this point, ESPN had sixty-six million cable subscribers, but they were only just beginning to really ramp their pricing leverage.
• ▶ 1:11:17 Ben Gilbert Nobody would have told you when that deal, the ABC deal, was being made that ESPN was gonna turn out to be the weightlifter of the group.
• ▶ 1:11:30 David Rosenthal ESPN's average monthly affiliate fee with their cable partners was still less than a buck, so there was so much more room to scale ahead of it.
• ▶ 1:11:40 David Rosenthal But absolutely quickly after Disney acquires Cap Cities in 1996, ESPN becomes this just crown jewel within the company almost overnight and almost completely by accident.
• ▶ 1:12:22 David Rosenthal So, this is, like, the heyday of ESPN here in
• ▶ 1:13:06 David Rosenthal The cost to operate ESPN beyond the sports rights was not that much.
• ▶ 1:13:15 Ben Gilbert So, so Disney is already in the cable game before acquiring ABC Cap City's ESPN.
• ▶ 1:13:35 Ben Gilbert But now that they have ESPN, they're able to, like, collectively bargain with the cable companies.
• ▶ 1:13:41 Ben Gilbert So not only could they command premium rates for ESPN, they would also say, oh, the, yeah, you want the Disney Channel and A&E and Lifetime?
• ▶ 1:15:31 David Rosenthal ESPN is this wholly separate thing.
• ▶ 1:15:49 Ben Gilbert But the correct move that they figured out eventually was kind of firewall ESPN out on its own.
• ▶ 1:15:54 Ben Gilbert Make the best ESPN you can and just enjoy the dollars.
• ▶ 1:16:05 Ben Gilbert This is how they funded it all, was all the cash that ESPN and the cable networks, but mostly ESPN, were spitting out.
• ▶ 1:16:31 Ben Gilbert ESPN also further stabilized the business during the ups and downs of animation, and here, David, is an astonishing statistic.
• ▶ 1:16:40 Ben Gilbert So we're flashing forward, but later on, in the 2008 to 2011 time frame, Disney's cable networks segment, of which analysts believe that three quarters of the cable network segment is ESPN, that segment accounted for 60% of the entire…
• ▶ 1:18:27 Ben Gilbert Other than buying ESPN.
• ▶ 1:18:28 David Rosenthal Other than buying ESPN.
• ▶ 1:21:49 Ben Gilbert Yeah, and with Capital Cities, ABC, ESPN coming in, it's a little bit confusing how to think about and organize the company, because before you had this nice, tidy flywheel business.
• ▶ 1:26:10 Ben Gilbert Animation in the dumps, before it was Parks holding the company up, but now it's ESPN holding the company up.
• ▶ 1:26:16 David Rosenthal And even ESPN for, you know, a short period of time is shaky, like, sporting events stop after nine 11.
• ▶ 1:36:41 David Rosenthal Largely, in part, thanks to the Walt Disney Company and ESPN riling everybody up against them.
• ▶ 1:37:13 David Rosenthal They've got freaking ESPN, which is still crushing it.
• ▶ 1:37:20 David Rosenthal They sense this opening, this weakness, and wouldn't it be amazing if Comcast could all of a sudden acquire its most important supplier in ESPN that has all of this leverage over them.
• ▶ 1:37:32 Ben Gilbert They're constantly going to war with ESPN every year to renegotiate the carriage rates.
• ▶ 1:37:38 David Rosenthal We might be able to get ESPN.
• ▶ 1:37:44 Ben Gilbert Just to underscore this ESPN thing.
• ▶ 1:38:13 Ben Gilbert Thanks to its suite of channels anchored by ESPN, Disney received a big chunk of that money, and it grew like clockwork.
• ▶ 1:38:25 David Rosenthal Man, it's all, all about ESPN.
• ▶ 1:38:46 David Rosenthal Yeah, which is really ESPN.
• ▶ 1:47:01 Ben Gilbert It was because it had ESPN, but it also cost the company
• ▶ 1:47:11 Ben Gilbert It's the flywheel business and the ESPN affiliate slash advertising cable business.
• ▶ 1:47:22 Ben Gilbert And it's worth it because buying ESPN was this pseudo infinite wellspring of capital to fund everything else.
• ▶ 1:48:10 Ben Gilbert And, you know, ESPN is arguments one, two, and three of why was he a great CEO?
• ▶ 1:48:19 Ben Gilbert And also Disney's renaissance, but like, I'd put that at four below ESPN, ESPN, and ESPN.
• ▶ 2:32:30 Ben Gilbert Except for ESPN.
• ▶ 2:57:27 Ben Gilbert ESPN kept providing the cash to do all of this.
• ▶ 2:57:32 David Rosenthal ESPN paid for Pixar, Marvel, and Lucasfilm.
• ▶ 2:57:37 Ben Gilbert With about four years of ESPN cable profits.
• ▶ 2:58:02 David Rosenthal So speaking of ESPN, come 2015, ESPN and all the rest of Disney is really riding high.
• ▶ 2:58:31 David Rosenthal Use the cash flow geyser from ESPN to add and feed to the flywheel on the Disney side.
• ▶ 2:59:02 David Rosenthal So on that earnings call on August fourth, 2015, Bob Iger mentions that ESPN was experiencing quote, modest subscriber losses due to consumer cord cutting of cable subscriptions.
• ▶ 2:59:19 David Rosenthal It would come out later in Disney's annual report that ESPN lost three million subscribers that year.
• ▶ 2:59:26 David Rosenthal Which still meant it had ninety-two million in total.
• ▶ 2:59:29 Ben Gilbert But still, they'd only ever grown.
• ▶ 2:59:32 Ben Gilbert I mean, I think they hit around a hundred million and kind of stayed flat for a while, because a hundred million households...
• ▶ 2:59:39 Ben Gilbert But ESPN and anything related to ESPN, revenue only ever went up.
• ▶ 3:00:07 David Rosenthal This sets off a barely controlled freak out across the entire media landscape with ESPN and this earnings call as like ground zero.
• ▶ 3:09:04 David Rosenthal The next year in 2017, they announced that they're gonna accelerate that option to purchase a controlling stake in BAM Tech, and they announced publicly that they will be launching an over-the-top direct-to-consumer streaming service for…
• ▶ 3:10:15 David Rosenthal And look, this is another point where having ESPN as part of the company as a bulwark, even though ESPN is now declining,
• ▶ 3:10:27 Ben Gilbert And it means that you have to nerf the ESPN offering on streaming because you need to keep that gravy train flowing in.
• ▶ 3:10:36 Ben Gilbert So the ESPN plus thing that ended up debuting in 2018.
• ▶ 3:10:41 Ben Gilbert All the content that almost no one wants to watch because all the good stuff is still on ESPN, the cable channel that prints cash.
• ▶ 3:10:51 David Rosenthal And like, look, it's a really tough thing for the ESPN side of the business to move to direct to consumer because part of the whole magic of the affiliate fee business model is you get paid a subscriber fee whether those subscribers watch…
• ▶ 3:11:22 Ben Gilbert There are way fewer people who are willing to subscribe for a high dollar amount, call it 30 dollars, to ESPN directly than there are people who are willing to pay 50, 70, 80, a hundred dollars for all the channels.
• ▶ 3:25:01 David Rosenthal Wholly and completely different business model than either the core Disney flywheel or the ESPN affiliate fee model.
• ▶ 3:29:32 David Rosenthal Then there's the whole cable ESPN side of the house.
• ▶ 3:29:50 Ben Gilbert You can actually still grow your revenue for a while if you're in the high leverage position that ESPN is because you can just raise your prices faster than.
• ▶ 3:30:17 David Rosenthal Basically, cable and ESPN enter the endgame, to use an Avengers term.
• ▶ 3:30:23 Ben Gilbert So that's on ESPN's revenue side.
• ▶ 3:31:01 David Rosenthal That probably is true, but they were hamstrung because there, there really weren't any other bidders except ESPN for so much of these rights, because ESPN had this whole scale economies power where, because they were getting the most cash…
• ▶ 3:31:51 Ben Gilbert Than an ESPN or that a TV network could because Amazon can get you as a prime subscriber.
• ▶ 3:32:14 David Rosenthal This is why ESPN won for many years, and this is why the tech companies are winning now.
• ▶ 3:32:51 Ben Gilbert So in 2006, just look at the Monday Night Football package that ESPN buys.
• ▶ 3:33:18 Ben Gilbert So the structural force, though, that's working against ESPN here is that ESPN used to be the only place that you could go to watch highlights and replays, and now you can get a lot of that on social media.
• ▶ 3:33:49 David Rosenthal And to be clear, we've probably undersold ESPN's creativity and innovation in this episode.
• ▶ 3:34:42 David Rosenthal You know, sure you can with like, 30 for 30 and stuff like that, but that's so small a niche at ESPN.
• ▶ 3:34:47 David Rosenthal The vast majority of the production that ESPN is making
• ▶ 3:35:08 Ben Gilbert They know a few years from now how much free cash flow they're going to get from ESPN in a way that they have no idea from their movie slate.
• ▶ 3:35:29 David Rosenthal I'm just making the point that it's not like as ESPN has come under this pressure that they could start building their own flywheel here.
• ▶ 3:35:42 Ben Gilbert How does ESPN Plus go?
• ▶ 3:38:56 David Rosenthal I mean, on the ESPN side, ESPN didn't do the marketing to consumers.
• ▶ 3:44:07 David Rosenthal And then there's this big question of what to do with the declining asset of ESPN.
• ▶ 3:44:12 Ben Gilbert I've, I'm just sitting over here chuckling this declining asset of ESPN.
• ▶ 3:44:34 Ben Gilbert But the thesis is maybe they can, using the ESPN streaming service.
• ▶ 3:44:51 David Rosenthal In response to that, in October of twenty-twenty-three, they do separate ESPN out into its own business segment for the first time in Disney's financial reporting.
• ▶ 3:45:00 David Rosenthal So there's now a sports business segment, which is ESPN.
• ▶ 3:45:31 David Rosenthal Into ESPN in return for a 10% stake in ESPN itself.
• ▶ 3:45:38 Ben Gilbert The NFL gets 10% of ESPN, uh, which is great if you're ESPN, honestly.