Disney = "Baller Status"

Photo retrieved from: http://wondersofdisney.webs.com/pals/donald/donbball2.gif

Summary
The Walt Disney Company, majority owner of ESPN sports, has negotiated a long-term contract for media rights over The National Basketball Association (NBA).  Time Warner Incorporated will also be a majority holder, but the distinction remains to Disney. The NBA league has come to an agreement with ESPN to broadcast in a new way for its consumers.  The goal is to have online video services that show live, and current regular-season games.  ESPN is a channel that must be purchased on top of many set top boxes, cable listings, and satellite options. Having online streaming of the games will be a new experience for the company.  The agreement will give Disney authority until the 2024-2025 season to air on Disney’s ESPN and ABC network (Cohen & Ramchandran, 2014). Thus far, Disney has put out $485 million dollars a year to NBA for the rights, and the price is expected to almost double.  Going back to the online broadcast of NBA games, ESPN has stated that they’ve been careful of what material they show (Cohen & Ramchandran, 2014). The worry is of any release to third parties that may ruin the image of NBA through its original broadcast.  ESPN will be broadcasting their first game on October 29th, one day after the season opener (Cohen & Ramchandran, 2014).

Opinion

In this article, you can see that the Disney has an excellent understanding of how to generate and excel their profits through business relationships.  We both are shocked at the amount that Disney has spent yearly so far to have the National Basketball Association (NBA) under its wing.  Just imagine what anyone can do with $485 million dollars, a lot right?  For anyone who has ever watched a NBA game on ESPN, you can tell that the quality of broadcast is fantastic. From the lighting, sound, and paid commentary that ESPN has invested in, it is all what makes it the premium station to watch it on.  We do believe that what the league has asked for, the online broadcast of its games, will indeed bring a wider range of audiences now.  For example, students who are at school, the usual concern is that there is no television to watch it on for them.  But now that can be easily fixed by watching it online.  The disadvantage for Disney is that there might be a reputational risk of harm to their broadcast.  This is true, any big company would be frantic to uploading live coverage that is usually paid for as a subscription. From Amit’s past experience of visiting Disneyworld in Orlando, there is a dedicated resort themed as an ESPN complex.  It is very intriguing, those guests who prefer sports and can relate to it, have an option to now book a stay there.  It just further goes to show how the business relationship that Disney makes are strategically thought out.

Questions/Feedback

1) What one other investment do you think Disney should have put $485 million dollars towards, if anything else?
2) Do you watch any sports on ESPN, if so how do you rate it, and if not where do you prefer watching your shows?

Citation
Cohen, B & Ramchandran, S. (2014, October 5). NBA Reaches Long-Term Rights Deals with Disney, Time Warner. The Wall Street Journal. Retrieved on September 26, 2014, from http://online.wsj.com/articles/nba-reaches-long-term-rights-deals-with-disney-time-warner-1412557587