Analyst: Could Comcast Buy A Stake In ESPN?

Could Comcast Corp. buy a stake in ESPN to become the dominant player in live sports streaming? One leading media analyst says the Philadelphia media giant is the obvious candidate to make a play for a piece of the "Worldwide Leader in Sports," according to The  Philly Business Journal.

Last week, Walt Disney Co. CEO Bob Iger said in a CNBC interview that the company is looking for “strategic partners that could either help us with distribution or content” and said it could entail a company taking an ownership stake in ESPN. During an appearance on the Marchand and Ourand Sports Media Podcast on Wednesday, analyst Jessica Reif Ehrlich of Bank of America Securities said Iger's revelation presents a clear opportunity.

"The first thing I thought of when he said content distribution, maybe a little bit financial, it just screams one company and that company is Comcast," Reif Ehrlich told hosts John Ourand of the Sports Business Journal and Andrew Marchand of the New York Post.

The combination of Comcast's cable reach, its sports rights and its Peacock streaming platform put it in a unique position to add value to ESPN, Reif Ehrlich said, specifically pointing to Comcast and subsidiary NBCUniversal's many "sports assets and sports aspirations." She said Comcast and Disney could partner in a joint venture, and though one side could have majority ownership, she doubted an outright sale would be the outcome. It would remain to be seen how Peacock would fit into any potential deal, she added.

Comcast subsidiary NBCUniversal's current sports rights include the NFL, MLB, Premiere League, the Olympics, PGA and more, which can all be streamed — some exclusively — on Peacock. Iger alluded to the fact that a partner would be brought on before the current deal for NBA broadcast rights is up in 2025, making it all the more attractive for Comcast and allowing the two media giants to vie for the bid together. Disney and Turner Sports currently control rights to NBA game broadcasts, and NBCUniversal is expected to bid aggressively for those rights when they come available.

Cord-cutting has hit Comcast as it invests further into its Peacock platform, especially with live sports. In the first quarter of 2023, the company lost 614,000 XFinity Cable subscribers, while adding some 2 million Peacock subscribers. Despite the subscriber growth, Peacock lost $704 million in 1Q, following a 2022 that saw it lose $2.5 billion. Comcast is making moves to stop those losses. It cut off free access to Peacock for Xfinity Cable subscribers as of June 26, and last week it upped the price of Peacock by $1 to $5.99 per month.

But Comcast is also adding content to the platform, specifically on the sports side, and partnering on ESPN could be an opportunity to provide even more. In the winter, Comcast will broadcast the first NFL playoff game made available exclusively on a streaming service and has a deal to broadcast an MLB game each Sunday throughout the season. ESPN holds rights to broadcast NFL, NBA and MLB games, and it recently acquired broadcast rights for the NHL. It also has wide-ranging rights in the NCAA, including college football where Comcast only has rights to Notre Dame games.

Sporting events, and broadcast rights for them, are highly-coveted in the media industry.