Wedbush says it's 'when not if' Apple will buy ESPN

Posted:
in iPod + iTunes + AppleTV edited August 2023

Analyst Dan Ives says that sports channel ESPN is the "perfect fit" for Apple TV+, and predicts Apple will acquire the station in the next six to nine months.




ESPN is currently owned by The Walt Disney Company, and there have been ceaselessly wild predictions that Apple should or must or will buy the whole Disney firm. Now Wedbush analyst Dan Ives is scaling down those expectations by focusing solely on ESPN, but at the same time is adamant that Apple will buy it.

"I believe it's a matter of when, not if ESPN and Apple get together," Ives said on CNBC's "Last Call" show.
"I think Apple is really the perfect fit. And I think this is something for Cupertino that they're looking to go after. Live sports content is the golden goose."

Rather than an acquisition, Apple has previously been rumored to become a strategic partner of ESPN.

Ive says that's possible, but is certain Apple will buy ESPN outright instead. His comments follow how Lionel Messi's joining Inter Miami CF has doubled subscriptions to Apple's MLS season pass.

He argues that Apple TV+ needs content and that sports will give it that, plus the costs of sports rights mean it will be the largest firms who get them.

"It's a new age," he continued. "And I think when you look at Apple, I mean, you're talking about coming here historically has never done acquisitions of this size, but you have 200 billion that they could ultimately go after and more."

"And I think it's just the start of Apple, Amazon, and others just going more and more after sports content," said Ives. "You look at ESPN, to me, it's just the perfect fit for Apple. either as a strategic partnership minimum, but we believe an acquisition could clearly happen here as we look into next six to nine months."

Buying ESPN is a "no brainer"



"ESPN as an acquisition or strategic partnership to Apple a no brainer," wrote Ives in a note to Wedbush investors seen by AppleInsider. "There is only one asset in our opinion that would accomplish this goal [of live sports on Apple TV+] and it potentially could be on the table depending on the Disney strategic overview and ultimately where [Disney CEO Bob] Iger and the Board land on this asset."

"We believe Apple would be much more interested in the ESPN asset than Disney overall as Cupertino is focused on a number of other key strategic initiatives with an acquisition of the Mouse not making a ton of sense in our view," he continued. "That said, acquiring ESPN ($50 billion+ price tag likely) would make a ton of strategic sense, gain valuable sports content, major TV rights across each of the major professional and college sports packages, and change the cross-sell opportunities and attractiveness of Apple TV looking ahead while putting Apple on the sports map globally speaking.

ESPN is an American channel and Apple has shown that it tends to want global rights to any sport it covers. It is possible to watch ESPN overseas, but in each territory where it's available, it is bundled with other services and it's not clear how the potentially complex contracts would work if Apple wanted to bring the service under its own streaming network.

Read on AppleInsider

Comments

  • Reply 1 of 17
    wood1208wood1208 Posts: 2,917member
    If ESPN is so good money making asset, than why Disney want to sell it? Apple does small selective deals that Apple knows worth and can generate short/long term revenue stream and overall value for Apple's product strategy. IMO Apple may get into some short of ESPN partnership with Disney for AppleTV+ than outright buy it. 
    FileMakerFellerjony0
  • Reply 2 of 17
    Assuming Disney would willingly sell, I'm in favor of Apple buying ESPN under two conditions:

    1. I don't want the monthly cost of Apple TV+ to automatically increase by $10 or $15 for all subscribers regardless of whether they watch sports. ESPN's (and Disney's) profits over the years came from the fact that cable/satellite/streaming bundle subscribers pay for ESPN whether or not they watch it. I like the price of Apple TV+ where it is now (even accounting for the price hike in late 2022).

    2. Post-acquisition, ESPN should be an optional monthly add-on to Apple TV+, but the price needs to be reasonable. I would be willing to pay, say, $9 or $10/month for ESPN during college football season. The problem with this idea is that other recent media reports speculated that Disney would need to charge consumers $15 to $20/month to make ESPN available on its own (or as a new part of the current ESPN+ streaming service) just to break even on exorbitant sports licensing costs. Presumably Apple would have to do the same.

    An even better thought is for Apple to make certain broadcasts available to regular Apple TV+ subscribers without a price increase or add-on requirement. For example, it would be fantastic if I could watch College GameDay on Saturday mornings and the national Saturday night college football game on Apple TV+ as a regular part of my subscription. Such an offering might entice a portion of Apple's subscribers to buy an ESPN add-on that would pay extra for access to every live football broadcast on Saturdays, Sundays, and Mondays.

    I'm a sports fan … but I no longer subscribe to any cable/satellite/streaming TV bundles because I don't want my money feeding into the unreasonable escalation of the cost of college and professional sports. Yes, it means I miss seeing a lot of games unless they're on over-the-air TV … but that was the only choice I could make. Unfortunately, it would probably take another 100 million people making the same choice to actually change things.
    tenthousandthings
  • Reply 3 of 17
    charlesncharlesn Posts: 889member
    I was about to dismiss this as more baseless Wall Street blather until I saw that it came from Dan Ives. He has a pretty astonishing record in his coverage of Apple--82% of his calls on Apple have been profitable. That doesn't necessarily mean he is right about ESPN, but this is about as good a truly "ediucated guess" as you're going to get. 

    However, that said, I'm not sure why ESPN is a great fit for Apple when it has become a problem child for Disney. In the heyday of linear cable, ESPN was an incredible cash machine for Disney, but so much has changed with live sports licensing and, of course, the rise of streaming, none of which has been great for ESPN. I don't see how Apple ownership would change that equation. At best, I could see where "ESPN on Apple TV+" as a branding play would make live sports and Apple TV+ more synonymous in the minds of consumers, and maybe that's enough, but ESPN as a business still seems very troubled. 
    edited August 2023
  • Reply 4 of 17
    I may be commenting using bad knowledge.

    ESPN is a channel that doesn’t own any sports league or teams itself.

    it likely has a small portfolio of broadcasting rights arrangements primarily cantered on the US.

    Why would anyone acquire such an entity instead of just outbidding the exclusives they have whenever they come up for renewal?

    In football there are developments where the sports teams themselves go into broadcasting with Real Madrid TV being a great example serving a global audience.There is an app for that and Apple can just sell a season pass and be the go to market aggregator.

    No need to buy ESPN. Waste of cash
    avon b7FileMakerFellerapplebynature
  • Reply 5 of 17
    Jeremy Allen White is white hot right now thanks to the breakout success of The Bear.  This should get a lot of buzz.
  • Reply 6 of 17
    For some odd reason if I click on the comment link on the “Future Apple Vision Pro may use liquid for lenses instead of glass” it takes me to the comment section of this ESPN story.
  • Reply 7 of 17
    rklarkla Posts: 13member
    Your last paragraph is why is Dan and his thoughts in this article is sooo off base. MLS + AppleTV works cause Apple has the GLOBAL right to stream all games everywhere. ESPN is not a rights holder but a licensee for which they have paid billions and still didn’t get GLOBAL rights. They are a production company with lots of commentary and the occasional game for live, but if I want to watch again or watch delayed? They have a patchwork of limited licenses. 

    Soccer is also a global sport, the next closest acquisition of rights would be formula 1 but they already sell direct in F1 website/app. 

    NBA as an America sport is probably the next closest for global distribution but again those rights would be $$$, which Apple doesn’t want to pay (see NFL negotiations) 

    At the end of the day Dan doesn’t seem to know the difference between a rights holder and a limited licensee. He has done a flawed analysis and drawn bad conclusions. 

    This goes against everything Eddie has said of why they went into MLS.

    If they were going to buy any part of Disney it would be the content rights that Disney wholly owns and is desired worldwide, their content library of animated & live action films along with rights to extend those franchise properties. 
    FileMakerFellerapplebynature
  • Reply 8 of 17
    jSnivelyjSnively Posts: 431administrator
    For some odd reason if I click on the comment link on the “Future Apple Vision Pro may use liquid for lenses instead of glass” it takes me to the comment section of this ESPN story.

    Had a little tech whoopsie this morning. Everything should be back to normal now 👍
    FileMakerFeller
  • Reply 9 of 17
    Ugh, just another reason for Apple to festoon our UIs with “Sports” categories. I’d be fine with it if there was a way for us to hide it, but it’s so damn prominent, and a waste of space. (Hey, I’m super into fitness, but I don’t need to see random strangers do their tribalist competitive shit for cash.)
  • Reply 10 of 17
    I may be commenting using bad knowledge.

    ESPN is a channel that doesn’t own any sports league or teams itself.

    it likely has a small portfolio of broadcasting rights arrangements primarily cantered on the US.

    Why would anyone acquire such an entity instead of just outbidding the exclusives they have whenever they come up for renewal?

    In football there are developments where the sports teams themselves go into broadcasting with Real Madrid TV being a great example serving a global audience.There is an app for that and Apple can just sell a season pass and be the go to market aggregator.

    No need to buy ESPN. Waste of cash
    Exactly this. Apple does not buy the middleman, Apple becomes the middle man.
    danox
  • Reply 11 of 17
    22july201322july2013 Posts: 3,598member
    rkla said:
    Your last paragraph is why is Dan and his thoughts in this article is sooo off base. MLS + AppleTV works cause Apple has the GLOBAL right to stream all games everywhere. ESPN is not a rights holder but a licensee for which they have paid billions and still didn’t get GLOBAL rights. They are a production company with lots of commentary and the occasional game for live, but if I want to watch again or watch delayed? They have a patchwork of limited licenses. 

    Soccer is also a global sport, the next closest acquisition of rights would be formula 1 but they already sell direct in F1 website/app. 

    NBA as an America sport is probably the next closest for global distribution but again those rights would be $$$, which Apple doesn’t want to pay (see NFL negotiations) 
    People who comment on this forum, and the people who write the articles, seem to forget the GLOBAL picture. But you understand. Apple's direction probably prevents it from buying US-only distribution rights.

    But it appears to me that you think the NBA is an "American sport" (your words) but it includes one Canadian team. Baseball/MLB is similar to the NBA, which has one Canadian team (it used to be two!) However note that Apple's baseball rights include distribution to Canada (I'm not sure about worldwide.)

    Apple's global interests force me to conclude that it would never invest in a US-only distribution deal, like ESPN, which does not even reach Canada let alone the world.
  • Reply 12 of 17
    danoxdanox Posts: 2,984member

    No, to date Beats is the largest Apple acquisition at a measly 3 billion dollars.

    Analysts/Wall Street keep forgetting that Apple is very frugal, and very particular in the companies that they buy, Apple leaves the large overpaying senseless acquisitions to Microsoft, Google, Amazon, Elon/Tesla, and Facebook.

    Apples best acquisition cost $400 million but it came with the best CEO in the last 25 years, and three other acquisitions, PA Semi, Intrinsity, and Anobit were critical to Apple’s, Arm SOC’s development, cost Apple a total of 1.1 billion dollars.

    No……

    edited August 2023
  • Reply 13 of 17
    danoxdanox Posts: 2,984member
    Assuming Disney would willingly sell, I'm in favor of Apple buying ESPN under two conditions:

    1. I don't want the monthly cost of Apple TV+ to automatically increase by $10 or $15 for all subscribers regardless of whether they watch sports. ESPN's (and Disney's) profits over the years came from the fact that cable/satellite/streaming bundle subscribers pay for ESPN whether or not they watch it. I like the price of Apple TV+ where it is now (even accounting for the price hike in late 2022).

    2. Post-acquisition, ESPN should be an optional monthly add-on to Apple TV+, but the price needs to be reasonable. I would be willing to pay, say, $9 or $10/month for ESPN during college football season. The problem with this idea is that other recent media reports speculated that Disney would need to charge consumers $15 to $20/month to make ESPN available on its own (or as a new part of the current ESPN+ streaming service) just to break even on exorbitant sports licensing costs. Presumably Apple would have to do the same.

    An even better thought is for Apple to make certain broadcasts available to regular Apple TV+ subscribers without a price increase or add-on requirement. For example, it would be fantastic if I could watch College GameDay on Saturday mornings and the national Saturday night college football game on Apple TV+ as a regular part of my subscription. Such an offering might entice a portion of Apple's subscribers to buy an ESPN add-on that would pay extra for access to every live football broadcast on Saturdays, Sundays, and Mondays.

    I'm a sports fan … but I no longer subscribe to any cable/satellite/streaming TV bundles because I don't want my money feeding into the unreasonable escalation of the cost of college and professional sports. Yes, it means I miss seeing a lot of games unless they're on over-the-air TV … but that was the only choice I could make. Unfortunately, it would probably take another 100 million people making the same choice to actually change things.
    The only thing Disney has that Apple should buy is Pixar, back in the day, Steve Jobs sold it to Disney for 7.5 billion if Disney wants to part with it for 15 billion in cash no strings attached that is the only item of value Disney has to sell. Buy ESPN F no.
    edited August 2023
  • Reply 14 of 17
    charlesncharlesn Posts: 889member
    danox said:
    The only thing Disney has that Apple should buy is Pixar, back in the day, Steve Jobs sold it to Disney for 7.5 billion if Disney wants to part with it for 15 billion in cash no strings attached that is the only item of value Disney has to sell. Buy ESPN F no.
    And what do you see of value in buying Pixar? Once upon a time--like when Steve sold it to Disney--Pixar was the golden child of the animated movie business. Its cutting edge animation technology created animation like no one had ever seen before and its stable of superb storytellers generated one blockbuster after the next. But those days are LONG gone. Now Pixar is best known for producing wildly overpriced ($200 million!!!) box office bombs like Elemental. Apple doesn't need the Pixar name and it certainly doesn't need the expense of its production company infrastructure. If Apple were interested in getting into the animated movie business in a bigger way, it could simply create the "Apple Animation" brand -- which already communicates high quality -- and then commission a production entity to make the film, which can hire the top talent needed. This is what Apple does for its "Apple Originals" series and movies on Apple TV+ -- Apple isn't the production company, it simply commissions the productions from others. 
    bikerdude
  • Reply 15 of 17
    danoxdanox Posts: 2,984member
    charlesn said:
    danox said:
    The only thing Disney has that Apple should buy is Pixar, back in the day, Steve Jobs sold it to Disney for 7.5 billion if Disney wants to part with it for 15 billion in cash no strings attached that is the only item of value Disney has to sell. Buy ESPN F no.
    And what do you see of value in buying Pixar? Once upon a time--like when Steve sold it to Disney--Pixar was the golden child of the animated movie business. Its cutting edge animation technology created animation like no one had ever seen before and its stable of superb storytellers generated one blockbuster after the next. But those days are LONG gone. Now Pixar is best known for producing wildly overpriced ($200 million!!!) box office bombs like Elemental. Apple doesn't need the Pixar name and it certainly doesn't need the expense of its production company infrastructure. If Apple were interested in getting into the animated movie business in a bigger way, it could simply create the "Apple Animation" brand -- which already communicates high quality -- and then commission a production entity to make the film, which can hire the top talent needed. This is what Apple does for its "Apple Originals" series and movies on Apple TV+ -- Apple isn't the production company, it simply commissions the productions from others. 
    charlesn said:
    danox said:
    The only thing Disney has that Apple should buy is Pixar, back in the day, Steve Jobs sold it to Disney for 7.5 billion if Disney wants to part with it for 15 billion in cash no strings attached that is the only item of value Disney has to sell. Buy ESPN F no.
    And what do you see of value in buying Pixar? Once upon a time--like when Steve sold it to Disney--Pixar was the golden child of the animated movie business. Its cutting edge animation technology created animation like no one had ever seen before and its stable of superb storytellers generated one blockbuster after the next. But those days are LONG gone. Now Pixar is best known for producing wildly overpriced ($200 million!!!) box office bombs like Elemental. Apple doesn't need the Pixar name and it certainly doesn't need the expense of its production company infrastructure. If Apple were interested in getting into the animated movie business in a bigger way, it could simply create the "Apple Animation" brand -- which already communicates high quality -- and then commission a production entity to make the film, which can hire the top talent needed. This is what Apple does for its "Apple Originals" series and movies on Apple TV+ -- Apple isn't the production company, it simply commissions the productions from others. 

    Disney has destroyed Pixar, but it is still the only thing worth buying. Nothing else is close, Pixar before Disney, and after Disney the tale of two companies, a new home with Apple is its only chance at resuscitation. The rest of Disney, ABC, and ESPN is trash.
  • Reply 16 of 17
    rklarkla Posts: 13member
    rkla said:
    Your last paragraph is why is Dan and his thoughts in this article is sooo off base. MLS + AppleTV works cause Apple has the GLOBAL right to stream all games everywhere. ESPN is not a rights holder but a licensee for which they have paid billions and still didn’t get GLOBAL rights. They are a production company with lots of commentary and the occasional game for live, but if I want to watch again or watch delayed? They have a patchwork of limited licenses. 

    Soccer is also a global sport, the next closest acquisition of rights would be formula 1 but they already sell direct in F1 website/app. 

    NBA as an America sport is probably the next closest for global distribution but again those rights would be $$$, which Apple doesn’t want to pay (see NFL negotiations) 
    People who comment on this forum, and the people who write the articles, seem to forget the GLOBAL picture. But you understand. Apple's direction probably prevents it from buying US-only distribution rights.

    But it appears to me that you think the NBA is an "American sport" (your words) but it includes one Canadian team. Baseball/MLB is similar to the NBA, which has one Canadian team (it used to be two!) However note that Apple's baseball rights include distribution to Canada (I'm not sure about worldwide.)

    Apple's global interests force me to conclude that it would never invest in a US-only distribution deal, like ESPN, which does not even reach Canada let alone the world.
    Yes the NBA is an American sport...and Canada is in America, North America specifically. I didn't say it was a US sport, but even if I did, one team out of 30 team doesn't change the point. There is a global audience for the NBA, and to your point buying TNT or ABC would not give you the rights to global distribution and buying ESPN won't give them global rights to anything ESPN broadcasts so why would they. 

    The advantage of MLS season pass is that Apple has basically all the rights everywhere so all Messi fans worldwide & Robert Taylor's dad in Finland can watch all the games in real time or the next day on MLS season Pass. (Which the commentators won't stop telling us) If Apple can't leverage its billion+ devices GLOBALLY it is unlikely they are interested.

    MLB is an exception, but those limited games are still avail in 60 countries with no local restrictions and for free with base Apple TV+. Not sure their goal except to maybe mine some data for future licensing deals. If Apple can show significant global watching then it could be an advantage to MLB or other sports to license to Apple so they can not only make license fees but also expand the brand globally. The leagues make ALOT of $$ on merch. ie. Messi cost a lot of $ but how many Jerseys did they sell and $ went to MLS & Inter-Miami for every one sold. 

    Thanks for responding to my post and maybe Dan can learn a thing or two from us. haha
  • Reply 17 of 17
    coolfactorcoolfactor Posts: 2,259member
    rkla said:
    rkla said:
    Your last paragraph is why is Dan and his thoughts in this article is sooo off base. MLS + AppleTV works cause Apple has the GLOBAL right to stream all games everywhere. ESPN is not a rights holder but a licensee for which they have paid billions and still didn’t get GLOBAL rights. They are a production company with lots of commentary and the occasional game for live, but if I want to watch again or watch delayed? They have a patchwork of limited licenses. 

    Soccer is also a global sport, the next closest acquisition of rights would be formula 1 but they already sell direct in F1 website/app. 

    NBA as an America sport is probably the next closest for global distribution but again those rights would be $$$, which Apple doesn’t want to pay (see NFL negotiations) 
    People who comment on this forum, and the people who write the articles, seem to forget the GLOBAL picture. But you understand. Apple's direction probably prevents it from buying US-only distribution rights.

    But it appears to me that you think the NBA is an "American sport" (your words) but it includes one Canadian team. Baseball/MLB is similar to the NBA, which has one Canadian team (it used to be two!) However note that Apple's baseball rights include distribution to Canada (I'm not sure about worldwide.)

    Apple's global interests force me to conclude that it would never invest in a US-only distribution deal, like ESPN, which does not even reach Canada let alone the world.
    Yes the NBA is an American sport...and Canada is in America, North America specifically. I didn't say it was a US sport, but even if I did, one team out of 30 team doesn't change the point. There is a global audience for the NBA, and to your point buying TNT or ABC would not give you the rights to global distribution and buying ESPN won't give them global rights to anything ESPN broadcasts so why would they. 

    The advantage of MLS season pass is that Apple has basically all the rights everywhere so all Messi fans worldwide & Robert Taylor's dad in Finland can watch all the games in real time or the next day on MLS season Pass. (Which the commentators won't stop telling us) If Apple can't leverage its billion+ devices GLOBALLY it is unlikely they are interested.

    MLB is an exception, but those limited games are still avail in 60 countries with no local restrictions and for free with base Apple TV+. Not sure their goal except to maybe mine some data for future licensing deals. If Apple can show significant global watching then it could be an advantage to MLB or other sports to license to Apple so they can not only make license fees but also expand the brand globally. The leagues make ALOT of $$ on merch. ie. Messi cost a lot of $ but how many Jerseys did they sell and $ went to MLS & Inter-Miami for every one sold. 

    Thanks for responding to my post and maybe Dan can learn a thing or two from us. haha

    It would be more correct to say "NBA is a North American sport". Saying just "American" refers to the US. They are not "United Staters". 

    As for Apple buying ESPN... meh. I prefer when Apple can add some value to an industry, or solve a problem.
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