Earlier today, Jimmy Pitaro, chairman of ESPN and sports content, Burke Magnus, ESPN executive vice president of programming and original content, and Hans Schroeder, executive vice president/chief operating officer, NFL Media discussed The Walt Disney Company, ESPN and NFL’s landmark, long-term agreement on a media conference call.
The audio replay will be available on ESPN Press Room and the transcript follows:
JOSH KRULEWITZ: Thank you for joining us on short notice here. We appreciate it, as I see the list starting to assemble here. This is Josh Krulewitz from ESPN PR and again, I’m honored to have the opportunity to discuss what is an extraordinarily exciting day of news for our company.
You should have now all received our press release, which outlines the details of our new 10-year deal with the NFL that begins in the year 2023. Just to alleviate some confusion, our current deal expires after 2021 and we reached a bridge deal for the 2022 season before getting to the new 10-year deal that begins in 2023, so just wanted to clarify that.
On the line with us is Jimmy Pitaro; he is the chairman of ESPN and sports content for the Walt Disney Company. Jimmy is joined by Burke Magnus, ESPN executive vice president of programming and original content, as well as Hans Schroeder, who’s the executive vice president and chief operating officer of NFL Media.
The format for today’s call will be Jimmy will make some opening remarks followed by Hans and then we’ll take as many of your questions as time allows. We probably have about 25 minutes.
JIMMY PITARO: Thank you, Josh. Thank you, everyone, for joining us on what’s undoubtedly a historic day for the Walt Disney Company and ESPN. To start, I want to emphasize one thing. This agreement is completely unique and unlike any we’ve ever reached with the NFL. It’s not simply an extension of Monday Night Football.
The league has been clear that a priority of theirs is, of course, reach, and through the breadth of our programming and platforms we offer at the Walt Disney Company, we will certainly deliver.
We’re thrilled with all of the new fan-first elements we’ve acquired in this landmark deal, and I hope the league achieved that goal of expanding their reach, and at the same time bring exceptional value to the Walt Disney Company and ESPN.
First, Super Bowls are back. We’ve also secured direct to consumer rights and content, including exclusive national games for ESPN+. We have 35 percent more regular season games, including end of season games with significant playoff implications, plus additional playoff match-ups, a better schedule, increased flexibility, and of course vast highlight rights.
So much of this is additive, and all of it is valuable, valuable to the sports fans that we serve, valuable to the Walt Disney Company, and valuable to the league.
I want to give as much time as possible for your questions, which I’ll be happy to try and answer, as will my colleague Burke Magnus. Burke, along with his programming team and so many other colleagues across our company deserve great credit for diligently working for months on this agreement. I also want to thank and salute Bob Chapek and Bob Iger, who are both enormous supporters of our NFL relationship and were instrumental in this deal.
If you look at what’s reflected in today’s announcement, which is all that the Walt Disney Company has to offer to an incredible partner like the NFL, you can understand why we’re so confident about the future. As Bob has said, we aim to stay ahead of the consumer by both securing direct to consumer flexibility and directly acquiring impactful streaming rights. Today’s deal is the latest example of that priority.
Now I’d like to turn it over to Hans Schroeder at the league, but before I do, I want to offer a special thank you to our NFL colleagues from Roger Goodell to Brian Rolapp to Hans to the owners.
They’ve all supported and embraced our vision, and we look forward to continued collaboration and success.
HANS SCHROEDER: Jimmy, thank you, and thank you everybody for making some time today. I would start just with echoing with Jimmy said a second ago and reciprocate that and say a very deep and sincere thank you to Burke and Bob and Bob and the entire Disney leadership team.
This is a very special day, I think, for the league, and when you think about going back almost now 35 years of our partnership with ESPN and you think about sports in America, you think about NFL and you think about ESPN and what an incredible partner ESPN has been over that time period, certainly with Monday Night recently but also 24/7 and 365 throughout the year with what they do to really engage our fans and build the NFL and tell all the great stories in and around the NFL.
While we’re excited to look backwards, we’re even more excited to look forward. The foundation has been the great partnership we have today, but that really led with a lot of hard work on both sides. I really think and believe for us to think about what the opportunities to bring our content and our great sport together with the incredible growing and innovating platforms that Disney is launching and growing across the board, and so as we — our view is very much about through a fan’s lens and trying to make sure we’re bringing our content and our games across all the screens we increasingly know our fans want to spend time on.
When you think about that and think about what ESPN and all the ESPN channels do but then what’s being added to this mix with ABC coming back into the partnership for a number of exclusive games but also Playoffs and Super Bowl, you think about the opportunities to leverage the different traditional channels and outlets ESPN and the Disney family have and some of the great things they did last year with us with the return to Raiders and the launch of the Raiders in Las Vegas, when you think about what we did over wild card weekend with the megacast we did there, that’s just the tip of the iceberg about what’s in this deal.
At the heart of it, too, is an expansion on the digital. I’m not sure there’s anybody in the media landscape in this country today that is growing, innovating and evolving their approach and their business in the way that Disney is.
So you think from our lens about how exciting that is to take our content and our games and being able to combine that with the great work Jimmy and Burke and their teams are doing on the Disney and ESPN side. Just really excited and so much looking forward to what the partnership is and can be ahead and all the great things that are in front of us.
Thank you again, Jimmy Burke, and your teams, and we greatly appreciate the partnership, and we just can’t wait to keep it going.
- I wonder if you could elaborate on Super Bowl, what you think you can do that hasn’t been done with the game in a while, putting the unique Disney spin on that game.
JIMMY PITARO: Yeah, thank you. Again, we’re incredibly excited to have Super Bowl again. We’re going to have two during the term of the deal. We’re excited to have that on broadcast and also have the opportunity to simulcast on ESPN.
I would add in to this discussion — I would highlight the fact that we have had a lot of success in terms of our alternative broadcasts and our ability to what we call megacast. I think if you look at what we did around the wild card game this past season with the NFL, if you look at what we did or what we do every year with the college Football Championship Game, we’re excited to continue to innovate in that regard and work with the NFL to identify new ways to present these games, innovative ways to present the games.
So all of that will be in partnership with the league. We don’t — we wouldn’t do anything without a close discussion and collaboration there, and it’s premature to talk about any ideas that we would have for our first Super Bowl. It’s several years away. But again, this idea of doing an alternative broadcast is something that certainly we’ll want to talk to the league about.
Couldn’t be more proud of the amazing — the incredible quality of production that our team at ESPN produces on a week-to-week basis, and you can expect that high quality to continue and you can expect the innovation that you saw, again, during the wild card game and all the innovation that you saw in connection with our college football championship megacast to continue.
I just want to get some clarity on the bridge deal. You have a new deal for next season, and then you will be part of the deal that was announced today? Could you just explain that?
BURKE MAGNUS: I think as you may be aware, in the last round of deals, our deal went one year shorter than NBC, CBS and FOX, and so we had to do essentially a one-year bridge for the 2022 season before getting into these next rounds of deals that were announced today that begin in 2023.
2022 will essentially look a little bit more like 2021 and less like 2023 in terms of all the new elements we announced today. There’s a couple new elements in 2022, but it was really to get us on to the same timing as the other broadcast partners, and so what was announced today starts in 2023 and then continues, in our case, for 10 years.
2022, is that financially different than where you’re at now?
JIMMY PITARO: We’re not going to talk about financial, but let me just expand on that a little bit. For both the 2021 and ’22 season, all the foundational components from our current agreement will be included, plus some select elements from the new agreement, so in ’21 we’re adding the two Saturday games with playoff implications the last weekend of the regular season, and then for ’22 it’s the same as ’21, but as Burke mentioned, there’s some additional games that are being added. So the Sunday morning ESPN+ game, plus one additional ABC Monday Night Football game will be added for ’22, and then in ’23 is when all the components of the new deal kick in.
In the new deal how many ABC Monday Night Football games will there be?
JIMMY PITARO: Three.
First, can you just go through the specifics of the ESPN+, like how many exclusives there are, and for the games — the normal games, they’re just going to be simulcast on ESPN+? Will there be a separate tier? What are the components of ESPN+? And then is there any competition between ESPN+ and ABC and ESPN or do you sort of see them working in tandem?
JIMMY PITARO: I’ll start on that, and Burke, chime in here. Direct-to-consumer rights were very key for us here, not just securing the international game for ESPN+, which was big, but also having the flexibility to take our other games across ABC and ESPN direct. And also on top of that, the ability to be more flexible with the distribution of our networks. That was all very important, and we were able to secure those rights.
Specifically to respond to your question, there will be one Sunday morning international game on ESPN+ every year, starting in 2022.
HANS SCHROEDER: I’ll just add from the NFL perspective, what’s so attractive and exciting for us about continuing this partnership is to see how Disney is navigating the media landscape that’s probably changing at a more accelerated pace than it’s ever done before, and so thinking about this deal and just the tip of the iceberg of what we’ve done together over the past couple years with some of the innovations on the alternative distribution and the different presentation of our games and the way to engage fans not only on different screens but in different ways, to me at the heart of this partnership is the flexibility and the opportunity to continue to grow together and to take advantage of everything Disney is doing across their collective set of assets and across the ESPN set of assets in a way that for us is really exciting knowing our fans are increasingly — still many of them are spending the majority of their time on traditional television platforms, but we also know an increasingly and especially younger fans are experiencing our games in different ways.
There’s a lot of different focus in and around this country about media companies going direct-to-consumer and launching new models. It’s tough for me to see anybody doing it better than Disney, and looking at what they’ve accomplished in the last couple years and that marriage and that opportunity for us to plug our content into everything they’re doing and feed all the different ways they’re distributing and will be distributing our games, that’s really incredibly exciting for us and I think for Disney, too.
For Hans, a more broader not only ESPN question, but in terms of the digital component with ESPN+ and with all the different companies, is the digital now going where it’s all direct-to-consumer with the subscription avenues in terms of being able to watch things digitally when these deals kick in? So I’m saying ESPN+, Peacock, Paramount+; am I understanding that correctly?
HANS SCHROEDER: No, I think I’d maybe modify that a little bit. I don’t think it’s an either-or approach for us. I think for us we look at it very much as how do we add distribution in a way that’s complementary that is reaching fans through new screens and new opportunities and is growing the way and opportunities they have to engage with our game. You’ll still see ESPN and now ABC be very much the core. You’ll see authenticated access and digital access that you might get through pay TV to those products. It will still be a core. And Disney and ESPN in particular has led the way on that. But you’ll see later on top of that, certainly our rights, and I’ll let Jimmy and Burke speak to it, but new forms of digital distribution some of which I’m sure will be D-to-C that sit on top of that, but then from an NFL lens it’ll continue to be other ways we distribute our games including our distribution and partnerships on mobile that we think is another additive way to engage a fan on whatever the best screen available and whatever the best screen they have in front of them.
For us we don’t think about it being either-or. We think about how do we pull these different platforms and models together and try and work with our partners in a way that we can leverage all of them.
So if you have cable and you want to watch a game digitally in 2025 on ESPN, does your cable authentication work or do you need ESPN+ to watch it on your iPad, away from my house? How can I watch the game?
BURKE MAGNUS: In the case of ESPN, you would be able to watch it both ways, if and when we simulcast on ESPN+, you could watch it with an ESPN+ subscription or you could watch it TV everywhere with your authentication from your multichannel subscription.
JIMMY PITARO: With the only exception being the game that’s on ESPN+ exclusively.
Jimmy, the idea of flex scheduling, the Super Bowl, yes, you paid an increase but you seem to have gotten more things, 17 of 23 in terms of the overall games. Would there be a chance that you wouldn’t have done a deal if you didn’t have these additives where you’re getting more for what you’re paying?
JIMMY PITARO: I can’t really speak to what would have happened. What I’d say to you is we have a history of being strategic and disciplined when acquiring rights, and that philosophy has not and will not change. Bob Chapek said it recently, we do deals that add shareholder value, and when you look at what we’ve acquired here in terms of the game inventory regular season, postseason, flex scheduling, quality of schedule, this is no exception. We now have more value than we’ve ever had before. So yeah, we feel really good about this, and we also feel like this deal is a win-win-win. It’s a win for us, it’s a win for the league, and it’s a win for most importantly our fans.
Just curious, there’s still a package out there that needs to be done at some point, the Sunday Ticket package, and indications are DirecTV is probably not interested. Wondering if you guys feel like you’re done with your NFL deals or is there any room left in the pocketbook to explore that?
JIMMY PITARO: Look, I’m just going to echo what Bob Iger said on an earnings call a couple years ago or maybe a year ago. We’ve had exploratory conversations with the league. Sunday Ticket is an incredibly valuable product. It’s interesting to us. When the league is ready, we’re interested in having that conversation with them.
There’s a window in the new deal that the NFL can sort of scratch the deals, reopen the talks, that sort of thing, but I’ve also been given indications that it can work both ways. There may not be an official window but if a rightsholder feels like, hey, we’d like to talk about maybe putting some more games on this platform or experimenting here or there that it’s not written in cement and sealed in Super Glue; is that correct?
JIMMY PITARO: Well, I’ll start. I guess flexibility is the magic word here: We talk about flex in terms of scheduling, but also we have flex in terms of what games actually go on our direct-to-consumer platform, ESPN+. So the league has been very progressive here and they’ve worked with us, and going back to my earlier point on the priority being audience expansion and growing reach, the league understands as well as we do that there’s a big opportunity to attract more fans including maybe casual fans on these other platforms and including younger fans.
Again, we’ve secured the ability to take the games on ABC and the games on ESPN and put them on ESPN+. It’s too early for me to comment on what our specific plans are, but I can tell you that we’ve secured the ability to do that. And then of course we do have that one game every year on ESPN+. I don’t know, Hans, if you wanted to add anything to that.
HANS SCHROEDER: I would only add that we’re going to be partners for a long time. ESPN was a little bit in a different position, given that the deals were currently finishing up were one year shorter, as we touched on earlier, and so we did extend our existing deal for one year to get to the ’23 time frame when all our deals were coming up and we can fully reconfigure some things across the board, including bringing the Super Bowl into the mix for Disney as a good example.
But when you layer those two years, we still have an existing partnership and then the extension out on top of that, we’re partners for a long time, and again, we couldn’t be more excited about it, and we couldn’t be more excited about a partner that’s going to innovate and grow with our game over that time period.
We can talk about sort of a back end of the deal, but that’s a long way away. The runway ahead of us for both sides is what we’re excited about and the opportunities we both have in front of us.
For Hans, philosophically how do you feel about what Jimmy just put out there, the notion of a megacast Super Bowl, something that viewers have never seen before?
HANS SCHROEDER: We’re excited about it. If you’ve seen what we’ve done over the last decade across our media rights, it’s really been a concentrated focus on continuing to grow availability and grow the different experiences with how fans can engage with NFL live games, and that’s both the game itself, it’s the content around the live game, and you think about this deal coming on the heels, again, of what we did with ESPN and Disney starting in week 2 in Monday Night Football in Vegas and what we did around the wild card and all the different assets and forms of delivery and production they did around those games, that has us nothing but excited.
Obviously we’re talking a lot about in this conversation our partnership with Disney, but we’ve seen that with some of our other partnerships, and we know our fan base is big enough that I think there’s a good chunk of our fans that want to engage in these new experiences, not only on different screens but with different forms of delivery. We think the creativity, the expertise that Disney brings on the production side and the assets they bring to distribute those experiences, we couldn’t be more excited about what they’re going to do with the Super Bowl when they get it in a few years.
For Jimmy or Burke, during your negotiations with the league, did you ever broach the possibility of attempting to get a different game inventory package as opposed to retaining Monday Night Football?
JIMMY PITARO: Look, Monday Night Football is such a big part of who we are at ESPN. It’s not just me. If you were to talk to our employees and our executives, there’s so much pride that we take in that game every week.
As a result, when we sat down with the league, and to be clear, these discussions took place over an extended period of time. They were incredibly productive. But obviously this was not overnight. One of the first conversations we had with the league was around Monday Night Football and how do we renew that but also expand.
I think you probably heard me talk about this. I’ve been consistent for several years now that we very much value our partnership with the league and that we’d be looking to not just renew but expand our relationship, and this deal does exactly that.
We could not be more pleased with where we netted out right now. I’ll let Hans speak for the league, but I believe that they’re pleased, as well.
HANS SCHROEDER: A hundred percent, Jimmy. Hopefully that’s come across, and again, there’s just so many ways that I would say that while this is the Monday Night Football package at its core, there’s so many new elements around it, where there are now nights where we’ll have two nights, one on ABC, one on ESPN. There’s the last weekend of the year and really what we think Disney is uniquely positioned to do to create that event is really the start of the Playoffs, the last week of the regular season, all the way to every year they’re going to be extended with a divisional game as part of their package and going deeper into the Playoffs and then ultimately through Pro Bowl.
You know, I think it’s a Monday Night package at its core, but it’s actually to me a really evolved package of games and adding things like flex, which is just a win-win for everybody, where we make sure that we’re getting the best game into the best window both for our fans and our partners. We couldn’t be more excited with how these conversations and where they led to.
Jimmy, any comment on the estimated cost of this, $2.8 billion annually, and for Hans, what’s the future hold for the NFL Network? Did you leave anything rights-wise for them?
JIMMY PITARO: No, no comment other than to just reiterate what I said before, which is that we have a history of being both strategic and disciplined when it comes to these deals, and we feel like we have more value than ever as a result of this deal.
HANS SCHROEDER: And look, NFL Network is going to continue to be a really key part of our overall media strategy, and they will definitely have games. We have seven games today, and that will continue. They’ll continue to offer the Red Zone. I think they’ll continue all for me, and with all due respect to the great job the collective ESPN team does, but in my humble opinion our folks do maybe the best job of bringing the NFL 24/7 and in a time like now with free agent in a frenzy and what that platform delivers and increasingly now on digital into social extensions, I think you’ll see NFL Media continue to be a really important part of everything we do, and as we think about these deals and these partnerships, obviously the partnerships themselves are really important, but it’s also how within those conversations we’re continuing to make sure there is an opportunity to grow and build our own assets.
Similar to what we are admirably seeing in the Disney side, we think there’s an opportunity to do more with our assets, to build more of a direct-to-consumer presence ourselves, and you’ll continue to see us do that across all of our assets with NFL Media.
You kind of touched on this earlier when you talked about what Bob said in the February earnings call about making sure that every deal makes sense for shareholder value going forward. Besides the obvious very blatant GRP ad revenue, affiliate revenue advantages to having this relationship with the NFL, is there any way you could sort of further contextualize the value of this package and all the peripheral properties that kind of come with it?
JIMMY PITARO: Yeah, it’s a good question. What I’d add to what I’ve already said is just the fact that the NFL is a year-round business for ESPN. It’s 24/7, 365 days a year, where we make a commitment to covering the NFL and covering it in an exemplary fashion.
And so obviously, live game rights are the jewel, are the centerpiece of this deal, but you can’t ignore the fact that highlight rights that we have, the footage rights are incredibly valuable to ESPN and the Walt Disney Company.
If you look at what we do every day, just from a studio perspective but now just to expand that, to the ESPN+ side, and you look at how well some of our original programming is doing on the ESPN+ platform, I would say that these ancillary rights are more important than they’ve ever been to us.
We really look at this deal in two ways: First, from a live game perspective, but second, from a highlights and footage perspective.
I think if you look at the industry, no one else does what we do in terms of covering the NFL. So again, just a critical component to our suite of rights. I don’t know, Burke, if you wanted to add anything to that.
BURKE MAGNUS: No, I mean, I think you’re exactly right, Jimmy. The ancillary rights, footage, highlights across linear and digital cross-platform, it’s essentially oxygen for ESPN on a 365-day basis, to cover the league, cover their stories, promote the game, and then pay it off with a nice games package.
How important was it for ESPN to get that flexible scheduling from week 12 on for Monday Night Football in this negotiation?
BURKE MAGNUS: Yeah, in the full suite of rights that we acquired, it was a critical component. I mean, when you’re on Monday, especially late in the season, when the schedule is built in advance, obviously from time to time there’s been games that haven’t had the stakes that you would want in order to drive audience. This is all within the NFL’s control. They’ve done it successfully on Sunday. We believe that our interested are aligned, obviously, as it relates to Monday late-season games, making sure that each of the games lives up to the national designation, and so it was really important.
But it was really important in the context of everything else that went into this new package, you know, more games and better games and postseason being at the top of the list.
For Jimmy, with the NFL now done, what do you see the landscape being with the way this new deal was set up, with Amazon getting exclusive package and how it’s going to relate to the next big package, which I’m looking is going to be the NBA, the second most popular sport in America? How is this going to shape that package moving forward?
JIMMY PITARO: Yeah, it really doesn’t. You know, we very much value the partnership with the NFL and we very much value the partnership with the NBA. The NBA still has several years left on our current deal, but we’re very pleased with that partnership to date and how those games have performed. We like the demos, the younger audience. We’re starting to innovate and try some new things in terms of how we’re covering the games, coming out of last season, being in the bubble in Orlando and having the ability to experiment, a lot of learnings there on the production side, and those learnings, or some of them, will be — some of the changes that we made or some of the things that we tried will be incorporated into our broadcasts going forward. But there’s definitely, like with the NFL, on the NBA side there is definitely a spirit of innovation and an expectation from Adam that ESPN and ABC will continue to innovate and to not be afraid to try new things.
But at a higher level, the partnership with the NBA is incredibly important to us and we’re looking forward to getting back at the table with Adam and his team when the time is right.
With digital being such an important part of these deals, I’m curious, Jimmy and Burke, just what you would say to your traditional pay-TV affiliates in terms of the role that they have over the term of this NFL deal?
JIMMY PITARO: Yeah, I’ll start there, Burke, and again, just chime in. Look, this is a new approach to deals. This specific deal is a reflection of the overall approach we’re bringing to sports rights deals, you know, using the unparalleled power of the Walt Disney Company, including, as you mentioned, multiple linear networks, direct-to-consumer, digital, social. As we sit at the table and speak to our partners, they understand very quickly that we’re looking to acquire rights for all of our platforms, and over the past couple of weeks we’ve been successful in that regard. You can expect that spirit to continue.
HANS SCHROEDER: I might just add, and I can’t speak obviously to your relationship with your affiliates, but to that part of the question, while digital is growing, the traditional TV ecosystem is still incredibly rich, incredibly deep, incredibly broad. We reach over 200 million people a year through television. We’re getting 40 telecasts a year with over 20 million people watching.
Going back to the heart of it, and again, what I think a partner like ESPN and Disney do so well is for us is continue that wide reach which has always been really important to us but look for ways to add to that and augment that.
I don’t think it’s a question of either-or at this point, and we’re certainly excited about the opportunity that Disney is going to have to grow new platforms with our content, but the existing and traditional ones are still really big, even if they’re not growing like they once were, and there’s still a ton of our fans that we know look there first to get our games and our content.
JIMMY PITARO: I just would highlight ratings. Obviously last season was an anomaly, but if you look at ESPN’s specific ratings but I think the league in general, we were up between 5 and 10 percent for the ’18 and 2019 seasons. So we were on a very good trajectory pre-pandemic. We’re excited to get back to some normalcy with next season. Go ahead, Burke.
BURKE MAGNUS: I was just going to say Hans’s point on the either-or was the right one, which is we don’t look at distribution that way at all. This is bringing the full array of the Walt Disney Company’s distribution platforms to bear from over the air television to multichannel subscription to cable television to digital and social and now direct-to-consumer.
Every single one of them is important in their own way, and that’s the way we’re looking at deals at this moment in time. You saw it last week with our NHL deal.
JOSH KRULEWITZ: I just want to say to the media thank you so much for your interest in covering this great story and your patience. I know we didn’t get to everybody, but it will be a good opportunity for me to plug our tremendous NFL team of Allie Stoneberg and Derek Volner. If you have any questions or follow-ups specifically, they are both available and happy to assist you with any follow-up questions, and our two websites, ESPNpressroom.com and ESPNfrontrow.com have releases and various other support materials that will help tell the story, as well.
I want to thank everybody for their time, particularly Hans, thank you so much for joining us, Burke and Jimmy. Appreciate all of you on what’s certainly an historic day for all involved. Thank you, all. Stay healthy and hopeful, my friends.
FastScripts Transcript by ASAP Sports