How A Game-Changing Disney-Netflix Merger Would Rescue ESPN In 2017

brodie999

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Disney is having a remarkable year, on course for a record-setting $7.6 billion in global box office. One major key to this success has been acquiring other companies with valuable IP and maximizing the growth and revenue potentials. Pixar, Marvel, and Lucasfilm all came into the Disney corporate fold, and all signs point toward the advisability of a couple of new big moves by Disney to further expand their holdings, build a bigger catalogue of new properties to exploit, have their own platform for sharing content with the largest possible audience as directly as possible, and finding a way to rescue ESPN from a slide that continues to be the one small drag on the company's stock and performance overall. The solution to all of these needs is simple but immense: Disney should buy Netflix, Paramount, and Sony.
Tall order? You bet it is, and I'm not saying it would be cheap or easy to accomplish, nor that I think it's destined to transpire. But if any company is positioned to pull it off in order to reap the enormous benefits, it's Disney. Let's look at the reasons why -- including some you may not have considered -- to see why this bold, big move makes sense...
While Disney's film and merchandising have enjoyed enormous success, lately ESPN has suffered declining viewership. ESPN lost 11 million subscribers over the last 6-year period, including more than 600,000 in October of this year. Granted, the Nielsen ratings data doesn't account for SlingTV and Playstation Vue, which also provide ESPN to subscribers, but the data and trends all point toward a decline for ESPN in the face of cord-cutting, new competitors, and other obstacles now and in coming years. Since ESPN is a major part of Disney's primary revenue stream (Disney Media Networks), it's going to be important to address these issues to boost the revenue stream, ease investors' fears, and improve Disney's stock valuation.
Without finding an option that provides a game-changing strategy, ESPN faces longterm trouble. Younger audiences increasingly care less for cable and rely more on multiple portable devices for viewing content. And inevitably, other sports viewing options will arise that provide streaming access and further undercuts ESPN's audience. Doing nothing, or attempting a half-measure, won't cut it. ESPN needs a big move, and soon, to get ahead of this situation and put it in the best position to take full advantage of the enormous potential of streaming to a huge, global, built-in audience.


Moving to a sustainable, stable streaming platform that allows live broadcast to a huge global audience is a good option. However, creating their own streaming service, or outsourcing the streaming to a third party, is far less appealing for Disney than getting hold of an existing, massive streaming service that serves many other needs while instantly putting ESPN in a completely new and ideal position.
Netflix has 83 million subscribers, and has enjoyed pretty constant growth. It has multiple deals with a wide variety of studios and production companies to stream content and create new exclusive content. And it's frankly the most recognizable name brand in content-streaming today.
The smart move for Disney, then, is to buy Netflix and move ESPN over to that platform. There are several options for the specifics -- make it an add-on service like the DVD option, or go for sheer quantity of subscribers by simply adding ESPN to the service at no extra charge (at first, anyway) to subscribers, and in either case providing advertising space during the streaming broadcasts. Keeping the games available for one month, for anyone wanting to save up a block of games to binge on (perhaps creating a new way of viewing sports programing) or re-watch them, would provided added advertising potential (albeit at a lower rate than during the live broadcast and subsequent first 24 hours of "rerun" streaming). And the fact this would make ESPN content more readily available on mobile devices via the Netflix app -- where ad revenue could again be generated to greater affect at higher rates, due to the large subscriber base -- shouldn't be forgotten.
Once Disney has Netflix, then they are in a position for a very different approach to Fox for a deal. Netflix’s subscriber base is approaching 100 million worldwide. They’ll break through in China and India (where they're already available but not yet making a big push) fully in the next decade, that’s inevitable and will send their subscriber rate into the stratosphere. So, with that platform, Disney can approach Fox about trading the Marvel franchises back, in exchange for a good deal for Fox movies on Netflix. Offer to top any HBO or other outlet offers for Fox content, and offer FX exclusive broadcast TV rights to Disney movies when they go to broadcast television. A combo of exclusive FX access to Disney premiere on broadcast networks plus a great deal for streaming Fox movies on Netflix is the deal to offer.
I’d say getting the X-Men and Deadpool is one obvious answer Disney would seek to increase their selection of franchises to exploit not only cinematically but also via Netflix after a purchase of the streaming service, which is why a deal with Fox will become important at that point. The potential for Marvel inserting X-Men into the MCU cinematically is huge, but the massive amount of properties in the whole “mutants” basket means exploiting that via Netflix TV shows is huge as well.



Purchasing Sony and Paramount is another big move that Disney could and should consider, along with a big Netflix merger. The back catalogue of films and TV shows would be a boon in the aftermath of a Netflix purchase that would surely see some competitors ending their deals to stream content on Netflix, as well as providing a lot of new IPs to develop. Paramount has Mission: Impossible, G.I. Joe, Transformers, Terminator, How to Train Your Dragon, and Star Trek for example, while a purchase of Sony would bring Spider-Man fully under Marvel's control and add Men In Black, Jump Street, Underworld, Resident Evil, and (if Sony manages to retain it) James Bond to Disney's list of franchises to exploit on film, television, and streaming.

I’d go for Paramount first, before Sony Pictures, just because it’s got more to offer. And I’d do that ahead of a Netflix deal, since having Netflix in-hand would make the “threat level” to other studios far more obvious. Which in turn means the Netflix and Sony deals would need to be either simultaneous or in quick succession, so nobody else steps in to gobble up Sony first instead.
Disney has had some remarkable success at the box office lately, and the coming years are shaping up to continue that trend, but ultimately they need their own streaming service for their large library of content, and they need to solve their ESPN problem before it grows worse. Netflix provides the answers to those problems, and opens new doors for Disney as well. All of their content in one place, a global streaming sports option, a subscriber base of nearly 100 million, and the chance to introduce advertising options into that already valuable equation. If Disney isn't going to sell or trade ESPN, then Netflix is the right call, and the sooner they make it the better.
How A Game-Changing Disney-Netflix Merger Would Rescue ESPN In 2017
 

brodie999

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Okay article, but they forgot to mention Viacom which Paramount is a part of. Not to mention it's all a bit unrealistically dreamy. Worth reading, but that's about it. Just a thought.
Yeah, If Disney considers all of these decisions about Buying Sony(Given their deal with Marvel to bring Spidey into the MCU),Paramount and Netflix, Then Fox is gonna be in a huge fight over X-Men control.
 

AdrenalineRush1996

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Yeah, If Disney considers all of these decisions about Buying Sony(Given their deal with Marvel to bring Spidey into the MCU),Paramount and Netflix, Then Fox is gonna be in a huge fight over X-Men control.
That's a stupid idea. Why on Earth would Disney buy Sony, Paramount and Netflix?

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brodie999

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That's a stupid idea. Why on Earth would Disney buy Sony, Paramount and Netflix?

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Well, Mark Hughes of Forbes is recommending it should happen as a way for Disney to further expand their holdings, Build a bigger catalogue of new properties to exploit, Have their own possible largest audience as directly as possible and find a way to save ESPN from a slide that continues to be the one small drag on the company's stock and performance overall.
 

AdrenalineRush1996

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Well, Mark Hughes of Forbes is recommending it should happen as a way for Disney to further expand their holdings, Build a bigger catalogue of new properties to exploit, Have their own possible largest audience as directly as possible and find a way to save ESPN from a slide that continues to be the one small drag on the company's stock and performance overall.

Do you really think it would be a good idea in order to save ESPN? Because I think to save ESPN, Disney could buy the remaining stock of the channel that they do not own since Hearst owns 20% of the sports channel. I'll say this, it's not even a good idea for Disney to buy some of their competitors like Sony and Paramount because if they bought all of their main competitors, then that would be a monopoly and that's not even a good thing. Netflix will probably say to Disney that they're not for sale and I can never see them being a Disney subsidiary like Pixar, ABC, Marvel and Lucasfilm.

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brodie999

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Do you really think it would be a good idea in order to save ESPN? Because I think to save ESPN, Disney could buy the remaining stock of the channel that they do not own since Hearst owns 20% of the sports channel. I'll say this, it's not even a good idea for Disney to buy some of their competitors like Sony and Paramount because if they bought all of their main competitors, then that would be a monopoly and that's not even a good thing. Netflix will probably say to Disney that they're not for sale and I can never see them being a Disney subsidiary like Pixar, ABC, Marvel and Lucasfilm.

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Well, You never know, No one knows because nothing's happened yet, We're just going to have to find out, Given Marvel, Lucasfilm and Pixar stayed the way they were when Disney bought the companies, Disney might decide to keep Netflix the way it is, If they ever decide to buy the streaming service.
 

AdrenalineRush1996

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Well, You never know, No one knows because nothing's happened yet, We're just going to have to find out, Given Marvel, Lucasfilm and Pixar stayed the way they were when Disney bought the companies, Disney might decide to keep Netflix the way it is, If they ever decide to buy the streaming service.
I doubt it.

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brodie999

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jaylop97

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I didn't expect Disney to have trouble with Espn not seeing a good amount of viewers in the younger demographic, then again kids aren't that big into sports.
 

brodie999

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I didn't expect Disney to have trouble with Espn not seeing a good amount of viewers in the younger demographic, then again kids aren't that big into sports.
Yeah, I definitely hope they find a way to get ESPN to see a good amount of viewers in the younger demographic again, By buying Netflix.
 

brodie999

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I don't see how Netflix could possibly save ESPN.

If they wanted to add a streaming service to ESPN, they would just do it. No need to spend billions on a website just for that.

By the way, ESPN already has a deal with Hulu, so that's off the table.
Well, No one knows what's going to happen in the future because nothing's happened yet, Sometimes, it's a lot easier to buy the whole than just the one item. Besides after seeing what Disney has done with Star Wars and Marvel, I'd have no problem with them taking on James Bond, Star Trek, Ghostbusters, Men in Black, Transformers, Mission Impossible or Arrested Development.
 
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brodie999

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That's a stupid idea. Why on Earth would Disney buy Sony, Paramount and Netflix?

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The Reasons I want Disney to buy them is because they lacked the Creative spirit they once had and They still lack it now even with these new acquisitions because they're Running out of properties to develop. That's Why They need more content and assets so they can finally get it back with nearly Every property ever made. And I think they can do it by navigating the monopoly and Anti Trust laws regarding mergers and acquire Some companies if They decide they want to do it. Look At all the Massive mergers that already took place and is happening right now and the huge Conglomerates that already exist. AT&T and WB, Verizon And Yahoo, MTG and Kongregate. Just to name a few, Etc. This isn't Really any Different And the Lucasfilm, Marvel And Pixar Acquisitions were bigger deals Actually than acquiring these companies probably would be. I think Paramount Would be the first of these hypothetical options for Disney to consider pursuing, since it's A cheaper Company to get At $10 Billion. But Sony's value is in Trouble right now, And if things don't improve this year, It Could wind up seeing its potential sale price drop to $25 Billion or less. And If it dips below that level, Then The Moment A major Slide starts to pause is a time For another Company to swoop in and try to potentially buy it For a bargain Price. And In This purely hypothetical scenario, Consider That A Sony Price Tag in the $24-or-less range means that it's possible to Acquire Sony and Paramount in theory - in theory, Of Curse- For Around $34 Billion. The IP they own and Back Catalogues should make That A tremendously tempting Opportunity. Netflix Would probably cost Disney $70 Billion according to Todd Juenger, So That's A harder Get But Still worthwhile, And The Total package Deal for Sony-Paramount-Netflix Is just a bit north of $100 Million- Steep, But The Payoff is enormous for Disney since they'd instantly have the Dominant streaming service with a massive library of content past and present to fill up That Service, As Well as the obvious best way to save ESPN. So I think they can definitely pull if off for A company that's already 3 times big as its size to get bigger and wider.
 

AdrenalineRush1996

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The Reasons I want Disney to buy them is because they lacked the Creative spirit they once had and They still lack it now even with these new acquisitions because they're Running out of properties to develop. That's Why They need more content and assets so they can finally get it back with nearly Every property ever made. And I think they can do it by navigating the monopoly and Anti Trust laws regarding mergers and acquire Some companies if They decide they want to do it. Look At all the Massive mergers that already took place and is happening right now and the huge Conglomerates that already exist. AT&T and WB, Verizon And Yahoo, MTG and Kongregate. Just to name a few, Etc. This isn't Really any Different And the Lucasfilm, Marvel And Pixar Acquisitions were bigger deals Actually than acquiring these companies probably would be. I think Paramount Would be the first of these hypothetical options for Disney to consider pursuing, since it's A cheaper Company to get At $10 Billion. But Sony's value is in Trouble right now, And if things don't improve this year, It Could wind up seeing its potential sale price drop to $25 Billion or less. And If it dips below that level, Then The Moment A major Slide starts to pause is a time For another Company to swoop in and try to potentially buy it For a bargain Price. And In This purely hypothetical scenario, Consider That A Sony Price Tag in the $24-or-less range means that it's possible to Acquire Sony and Paramount in theory - in theory, Of Curse- For Around $34 Billion. The IP they own and Back Catalogues should make That A tremendously tempting Opportunity. Netflix Would probably cost Disney $70 Billion according to Todd Juenger, So That's A harder Get But Still worthwhile, And The Total package Deal for Sony-Paramount-Netflix Is just a bit north of $100 Million- Steep, But The Payoff is enormous for Disney since they'd instantly have the Dominant streaming service with a massive library of content past and present to fill up That Service, As Well as the obvious best way to save ESPN. So I think they can definitely pull if off for A company that's already 3 times big as its size to get bigger and wider.
It will NEVER work. That's monopolising it and it's bad. Really bad. There's no way that Disney will ever buy their competitors Sony, Paramount and Netflix. That will NEVER EVER happen and you already responded to my comment a few months ago.

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