ESPN Strikes Barter Deal With AFL
Always on the lookout for additional sports
programming, ESPN, owned by Walt Disney Co., has structured an
unusual five-year agreement with the Arena Football League (AFL).
In what could be an equity model for the
future, the transaction not only gives the cable network national TV
rights to AFL games, but also a 10% ownership of the league. (In
essence, ESPN is now an AFL owner.)
In addition to the ownership position, ESPN
gets football programming without paying a multi-million-dollar
rights fee. The AFL will pick up production costs, estimated at
about $3.5 million, and split advertising revenue with ESPN after
various costs are absorbed.
Last season more than 65 million viewers tuned
in to watch AFL games on NBC, which has televised AFL for the last
four years. This year some 26 games, nine post-season, will be
televised by ESPN/ABC.