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Disney: We're Talking to Sports Leagues

The Walt Disney Co., parent of sports network ESPN, said it is in talks with the various professional leagues that have had to suspend live games during the COVID-19 pandemic, but offered fans little hope that those talks would lead to lower rates or rebates for games they are paying for but can’t watch.

Disney chief financial officer Christine McCarthy said on a conference call with analysts to discuss fiscal Q2 results that Disney would not get into specifics regarding its deals with leagues, but said the company is in talks with the various professional sports leagues, primarily around the return of league play.

“We are working very, very closely with the leagues and the conference partners and we are looking forward to the return of live events,” McCarthy said on the call. “We are in active discussions with them now.”

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The National Basketball Association, the National Hockey League and Major League Baseball all suspended their regular seasons in March as the coronavirus pandemic forced shutdowns across the country. While there have been several scenarios put forth to bring back league play as soon as June or July, no final decisions have been made.

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Consumers, pay TV distributors and politicians have chafed at the fact that customers are still forced to pay for sports channels that can’t show live sports. New York State Attorney General Letitia James fired off letters to pay TV companies in her state last week asking them to lower fees, and cable operators have said they would pass on any savings to consumers. Networks argue that any change in rates is up to the leagues, which has many believing that rate relief won’t come.

In the meantime, ESPN and other sports channels are busy trying to fill airtime normally used for games with documentaries, classic sports and anything else they can think of. ESPN has scored mightily with Chicago Bulls documentary The Last Dance, which has attracted strong ratings, and has held other events like a H.O.R.S.E. game with former and current NBA and WNBA players. Earlier this week, ESPN signed a deal to air South Korea’s Korean Baseball Organization to air six games per week. 

On the conference call, new Disney CEO Bob Chapek said sports rights continue to be “incredibly valuable” to Disney, but hinted it may be worth more to its streaming properties down the road. Disney’s ESPN+ nearly quadrupled its subscribers in fiscal Q2 to 7.9 million from 2.2 million in the period, and its Disney+ service, which finished the quarter with 33.5 million customers, added another 21 million by May 4.

“We think that live sports remains incredibly valuable to us, and we continue to have an interest in live sports rights given the unique slate of assets that we own,” Chapek said on the call. “We’re going to do that in a very disciplined manner. Existing consumer trends play a big part in how we think about the value of sports rights as they make the transition from linear over to digital. I think it's a bit premature to give any specific details on what the strategy is other than we are highly interested in those. We think we want to make the evolution along with the consumer as they go from linear to digital.”