Speaker 1:

From the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, welcome Inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision, and business. For over 230 years, the NYSE has been the beating heart of global growth. Each week, we bring you inspiring stories of innovators, job creators, and the movers and shakers of capitalism here at the NYSE and ISIS exchanges around the world. Now let's go inside the ICE House, here's your host Lance Glenn.

Lance Glinn:

I grew up with ESPN, Sports Center specifically is a constant part of my daily routine, and it quickly became the place where my love of sports was born. From the daily highlights to the late Stuart Scott's signature catchphrases booyah, the channel made every game feel larger than life. It was where I learned the stories behind the scores and began to appreciate the drama, strategy, and personalities that make sports so compelling. Our guest today, ESPN Chairman Jimmy Pataro, has led the network since starting as president in 2018. Under his guidance, ESPN is charting an ambitious course into the future with its new direct consumer streaming platform and enhanced app, instrumental in how fans connect with sports. He joins us to share how the network is shaping what lies ahead for the worldwide leader in sports. Jimmy, thanks so much for joining us inside the ICE House.

Jimmy Pitaro:

Thanks for having me, Lance.

Lance Glinn:

So ESPN is launching its new direct to consumer streaming service signaling the next era for the worldwide leader. ESPN already has had so many defining eras as you know from the rise of cable sports to the launch of ESPN Plus and now this. When you think about this new chapter, what does the next era mean to you personally, and how do you see it reshaping the way fans experience ESPN?

Jimmy Pitaro:

Two things are happening today. First off, we are going direct to consumer as you said. We are making 12 networks available for the first time, direct to consumer. That's over 47,000 live events. We've been working hard to build up our rights portfolio over the past few years and we've done a great job there. On top of our existing rights portfolio, we announced a large partnership, an expansion of our partnership with the NFL. We announced WWE, but we couldn't be more excited about our opportunity to make all of our networks and all of our content, all of our studio content, all of our films available direct to consumer. So that's part one.

Part two as you mentioned, is an enhanced app, and that's across the connected TV, mobile, tablet. Many new features and functionality launching today, and we're equally excited about that. We know that sports fans don't just want to watch. They want to experience, they want to interact and that's what we're providing here, and we're equally excited about the enhanced app. I will at the same time tell you, Lance, this is a marathon, not a sprint, right? This is the first inning. We're launching today with many new features, but everything that we have on our roadmap will not be live today. You'll see regular updates over the coming weeks, months, and years, and so look, our mission is to serve the sports fan anytime, anywhere. We love the traditional pay TV ecosystem. It's been very good to us, but we obviously see the trends and we need to be present, direct to consumer. We need to present sports fans with the opportunity to buy all the ESPN in one place.

Lance Glinn:

So you mentioned the enhanced app and I've been a user of the e ESPN app for a long time, so I'm excited for this enhancement, these new features that are going to come, and you mentioned it, right? Fans want more than just to watch the game. They want interactivity, whether that's fantasy, whether that's betting, whether that's being able to easily access box scores and statistics and whatnot. How do you see personalization and interactivity becoming central to this new ESPN experience in this new era?

Jimmy Pitaro:

Yeah, great question. Look, first off, we've led in personalization, right? We've been investing in personalization, right? Content to the right user at the right time for many years. So before today, you could favorite a sport, a league, a team.

Lance Glinn:

I have my Yankees, my Giants, my Rutgers all ready to go.

Jimmy Pitaro:

Okay, Yankees, Giants, Notre Dame.

Lance Glinn:

There you go.

Jimmy Pitaro:

Okay, but we very much pride ourselves on leading in the interactive space, and that includes personalization. Fast-forward to today, and we are taking the next step here, which is a personalized sports center and something, it's a product. Look, I'm a huge sports fan. One of the things I've always wanted is a sports center that's dedicated to me and my Yankees, giants, Nicks Rangers, Notre Dame, and so I woke up this morning and that's what I got, and so if your team played last night, if there's relevant highlights for you, that's what you're going to get. You're also going to get the top plays. You're going to get lowest common denominator stuff. The most prevalent news, if you will and so that I think is the best example of how we're leaning into interpersonalization.

Lance Glinn:

It's Devils for me. I know Rangers for you. So if you think about the legacy of ESPN and cable and the potential legacy of ESPN now in direct to consumer streaming, how do you balance honoring this rich history that ESPN has had that allowed me to grow up loving sports while still pushing ESPN into something new?

Jimmy Pitaro:

Well, another really good question. I want to be clear, we will still be present in the traditional pay TV universe. So we believe that there's still a ton of value in the pay TV ecosystem, whether it's direct TV, charter, Comcast, or the Digital VPDs, YouTube TV, Hulu Live. We're not incentivized at all to have people cut the cord and go direct. Really what you're going to see is us going after people that are on the sidelines. That's going to be our focus. That's going to be who we are marketing to.

So we believe that this is going to be in large part additive to the current ESPN subscription base, and at the same time, the experience within the ESPN app will be the premier sports destination. So whether you access us or subscribe to ESPN in the traditional way through a virtual NVPD or direct, our focus is on driving you to the ESPN app, because again, that's where all these new features, that's where all this new functionality will be available and so we're working with the traditional distributors to get that message out there. "Hey, authenticate, go to the ESPN app, use your credentials, and then you will access all of this new functionality."

Lance Glinn:

So outside of this direct to consumer streaming, outside of this enhanced app, there's a lot going on at ESPN right now. A lot's happened. Earlier this month, the ESPN acquired the NFL network and other NFL media assets including linear rights to Red Zone. NFL is getting a 10% equity stake in ESPN in the deal. You said that this deal fuels ESPN's digital future and sets the stage for this new direct to consumer app. So how central was the NFL partnership to that bigger vision of what ESPN is building digitally?

Jimmy Pitaro:

We love our relationship with the NFL and we've been looking for ways to expand for some time to expand that relationship. We've had conversations with them over the years about their media assets. As you said, including NFL network. From a direct to consumer perspective, the opportunity to take ownership of the NFL network and include that in ESPN direct to consumer was incredibly compelling for us. There's the additional games, there's the game recaps, there's the film library. There is all of their studio programming.

Once the deal closes, our intention is to include all of NFL network in the base tier at 29.99 of ESPN direct to consumer. So that was was I think the centerpiece of the four deals that we did with the NFL, but there are other components, including partnering with them on our launch today and making sure that we were aligned around the features and functionality as they relate to NFL games, NFL content. There was also the opportunity to bundle with NFL + Premium, which includes Red Zone. That bundle will launch on September 3rd for 39.99.

And then there was the draft, which was really important to me, really important to the leadership team at ESPN, and quite frankly, really important to all of our employees at ESPN. It's a huge part of our identity. We launched the draft with the NFL. By the time this current extension expires, we'll have been partnered with the NFL on the draft for 50 years. So there are many elements of this deal that are important, but I'd say just going back to my earlier point, the most important element is our taking ownership of NFL network for direct to consumer.

Lance Glinn:

And unrelated to this recent partnership with the NFL, ESPN in 2027 will produce and televise its first Super Bowl, Super Bowl 61 in Los Angeles. Congratulations first and foremost.

Jimmy Pitaro:

Thank you.

Lance Glinn:

I know that's a big moment for the network. So as you're building towards that moment, what does it mean just for ESPN to be now part of the rotation and how grand will this broadcast be for the network in now just under two years?

Jimmy Pitaro:

Look, we've spent years improving our Monday night football broadcast. We have Joe Buck and Troy Aikman as you know.

Lance Glinn:

The best in the business, I think.

Jimmy Pitaro:

I agree. We have Peyton and Eli doing the majority of Monday night football games on ESPN2. We've done a fantastic job with NFL Live. We've done a fantastic job with Sunday Countdown, Monday Countdown, and then of course we're covering the league all year round across all of our studio programming. So the NFL is a huge part of what we do. So when we sat down and started negotiating the renewal several years ago of Monday night football out of the gate, we made it very clear to the league that getting in the Super Bowl rotation was really important to us, and to their credit, they got it and they worked with us and so yeah, the first Super Bowl ever for ESPN will be in 27, SoFi LA, very exciting for us. That's coincidental, very serendipitous because Disney owns the majority of ESPN.

They're based right down the street. The headquarters is. It'll be great for our sales team in terms of sponsorship and hospitality. It'd be great to have our execs across the Walt Disney company there. It's a fantastic stadium. I've been there many times, and they're wonderful people, the folks who run that stadium and so we're really looking forward to it, but yeah, it'll be a defining moment for us. It'll be the biggest event. Needless to say, it'll be the biggest event we've ever produced, and we've already started planning for it. We have executives who have been appointed within ESPN and also at Disney to spend the majority of their time focused on this building up to the Super Bowl. So yeah, we're all incredibly excited about it,

Lance Glinn:

As are we. We're excited to obviously see it on ESPN as you said for the first time in the network's history. So I spoke earlier to how fans today don't just want to watch games, right? We want to play fantasy, we want to play specs. Two things I do often frankly, we want to track stats, personalize our own experience, and we talked about how the ESPN app, even over the years before today has had personalization and now that's going to an even greater level, but with these NFL assets now in the mix, how much closer are you to creating sort of an all-in-one hub for the NFL, all-in-one hub of football inside of ESPN?

Jimmy Pitaro:

Look, we cover all sports. We're the place of record. When something happens in the sports world in general, people tune into ESPN, and so we pride ourselves on that. We pride ourselves on the breadth and depth of our rights portfolio. The NFL is incredibly important. So is our partnership with the NBA, the WNBA, the SEC, the ACC, the college football playoff, tennis, golf, premier lacrosse league. I can go on and on in terms of our rights, our partnerships, and we're very pleased with what we have. We do not have plans to create an NFL hub within ESPN.com or the ESPN app. I will tell you that once the deal closes and we fully acquire the NFL network, that will be a marquee asset for ESPN, and it will have prominent placement within our digital properties, and the team is now starting to think about where or how that is presented within our various digital platforms.

Lance Glinn:

So in addition to the deal with the NFL, ESPN announced in early August, a partnership with WWE. This agreement will bring things like WrestleMania or events like WrestleMania, SummerSlam, Royal Rumble among other WWE premium live events to the ESPN platform. What made WWE the right partner, and how does this fit into your broader strategy?

Jimmy Pitaro:

One of the challenges that we all have in the direct to consumer world is churn, and so when Nick Khan and I started to talk about a potential WWE partnership, the first topic in those discussions was churn, and could we work together to fill gaps or voids in our schedule during the calendar year? And the answer was yes. We have a fantastic relationship with TKO. We have a fantastic relationship with Nick and the WWE folks, and we're excited to work together with them on these premium level events. Look, ESPN was started with entertainment in its title, and so this obviously tucks right into our rights portfolio. There's fantastic athleticism, there's huge personalities, there's great storytelling. We pride ourselves on being a storytelling enterprise, and we feel like this is a natural fit, a natural extension of what we do at ESPN.

Lance Glinn:

So you've described and have talked about in our conversation this as part of building out ESPN's unprecedented content portfolio, right? You named all the sports and all the different networks and leagues that ESPN has partnerships with that are broadcast throughout its different networks. How do you see all these different entities helping to attract different types of audiences or extending engagement in unique ways, whether you're a college football fan, SEC ACC, whether you're WNBA, like you said, even premier lacrosse, we had Paul Rabel on the podcast before too. How do you see all of these different entities sort of working together to help bring regardless of the fan that you are to ESPN and his platforms?

Jimmy Pitaro:

Look, we want to be the front door for sports fans. We want to be the starting point, and one of the ways you accomplish that is through your great coverage, like I said before, place of record, our reporting, our investigative journalism, our daily news reporting, our fantasy stats schedules, all of our studio programming. That's one of the ways. The other really important component of our entire strategy, rights portfolio, and so you asked me about WWE, let's go back to that in terms of your question on audience. One of the things that was really attractive to me regarding the WWE is the fact that the audience is younger than our typical fan at ESPN and it's more female.

It's 38% female, and so that's compelling to me when we talk about our priorities at ESPN, one of them is audience expansion, and that's what all of our employees are focused on, expanding our audience in smart, creative, innovative ways, and we believe that having this broad rights portfolio is going to help us with our core fan, continue to be relevant, continue to be the starting point, but also help us expand our audience to new fans. By the way, including casual fans. I am confident that someone like me is going to continue to engage with ESPN. Okay, what about younger people? What about casual fans? What about women? Are we doing enough to be the front door, the starting point, the place of record for all of these other fans, whether they're hardcore or casual?

Lance Glinn:

So Jimmy, as we begin to wrap up our conversation, the sports rights landscape has gotten incredibly competitive. Amazon, YouTube, Netflix, Apple among many others, all going after the same live sports that ESPN is as well. So in your mind, what gives ESPN this edge in this new environment with all these different players? Why should fans continue to think of ESPN as that front door, their home for sports? Even with this now, very competitive market.

Jimmy Pitaro:

Starts with our brand and our four letters. As you know, our direct to consumer service is called the ESPN and we contemplated many different options here, but we ultimately went with ESPN because we know that there's real power in our four letters. We do a ton of research. We have a world-class research team, and one of the things that I take a great deal of pride in is the fact that younger people love ESPN. They see us as the most innovative, the most trustworthy. They see us as a digital first brand, and so if you think about that, it's pretty incredible the fact that we've been able to, I guess thread this needle and maintain our relevance with the core traditional sports fan and also extend our brand and our relevance to younger people who are spending so much time on social platforms, on various digital platforms.

And so that really is our focus and our priority going forward, and we believe that everything I just said sets us up really well for today. Our massive digital reach, across .com, across the app, across social platforms and channels. If you look at how we're resonating, it wasn't too long ago, Lance, where we were the number one brand in the world on TikTok. Now, I think we're the number one media brand on TikTok, but we're up into the right in terms of engagement on that platform, in terms of engagement on Instagram, etc. And we take a lot of pride in that, and that is really helping our business and like I said, we believe that it sets the foundation for today's launch.

Lance Glinn:

Well, Jimmy, congratulations on today's launch. Congratulations on the new direct to consumer streaming, the new and enhanced app, and thank you so much for joining us inside the ICE House.

Jimmy Pitaro:

Thanks for having me, Lance.

Speaker 1:

That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen and follow us on X at ICE House podcast. From the New York Stock Exchange, we'll talk to you again next week Inside the ICE House. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties express or implied as to the accuracy or completeness of the information, and do not sponsor, approve, or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.