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Can New Soccer Rights Help Disney’s ESPN Business?

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Recent soccer deals

On August 13, Disney (DIS) secured multiyear viewing rights for soccer leagues in countries including the Netherlands, China, and Australia. The contract includes 300 matches from Australia’s Hyundai A-League and Westfield W-League, the Chinese Super League, and the Dutch Eredivisie. The financial terms of the deal were not disclosed.

A few days back, ESPN also struck a multiyear contract with Italy’s Serie A, one of the world’s top soccer leagues, to broadcast more than 340 matches each year. The Serie A teams include a few big names like Juventus, AC Milan, and Inter Milan. ESPN is also allowing viewers to watch these matches on ESPN+ streaming service, which was launched in April 2018 as a part of its DTC (direct-to-consumer) business strategy.

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ESPN’s soccer deals could drive subscriber growth

Soccer remains a very popular sport, so these multiyear soccer rights may not just boost viewership, they could also help ESPN improve subscriber growth. In the last few quarters, ESPN has continued to lose subscribers due to the soft pay-TV market. Both Dish Network (DISH) and Comcast (CMCSA) continue to witness a decline in subscribers due to the availability of low-cost video streaming services from Netflix (NFLX) and Amazon (AMZN) Prime. Thus, to remain in the race, Disney also launched the ESPN+ service as a part of its DTC model.

The chart above shows the Media Networks revenue growth of Disney in the last five quarters.

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