ESPN is a leading sports entertainment brand known for local, global, cable, satellite, and streaming services. These include the cable sports channel ESPN, pay television network ESPN2, sports website ESPN.com, over-the-top (OTT) subscription video streaming service ESPN+, and sports radio network ESPN Radio.
ESPN was originally founded in 1979 by Bill Rasmussen. The intent behind the company was to broadcast Connecticut sports through a cable channel. The channel was called Entertainment and Sports Programming Network, or ESPN for short.
Rasmussen and his son Scott struck a deal with the National Collegiate Athletic Association (NCAA) to grant ESPN broadcast rights for its sports. By late summer 1979, the first ESPN cable channel was live with 24 hours of programming on the weekends and specific hours of airtime during the weekdays.
By the 1980s, ESPN was the largest cable channel. In the years that followed, ESPN expanded both domestically and abroad, launching networks like ESPN Latin America and ESPN Asia. Tobacco company RJR Nabisco purchased a 20% stake in ESPN, but it sold its stake to Hearst Corporation (later Hearst Communications) in 1990.
ABC purchased a controlling stake in ESPN in the 1980s; after its 1995 merger with Capital Cities Communications, the new company was bought out by Walt Disney (DIS 0.59%).
While rumors have swirled around ESPN, it does not appear as though this company will hold an initial public offering (IPO) anytime soon. However, if you're interested in investing in adjacent businesses, you have several options to consider.
IPO
Is it publicly traded?
Is ESPN publicly traded?
If you're looking to buy ESPN stock, you should know that the company is not publicly traded, and there is no IPO on the calendar. However, the company is owned by Walt Disney, which is a public company. Walt Disney owns ESPN through its subsidiary, American Broadcasting Company (ABC). The mass media giant controls an 80% stake in ESPN.
The remainder of ESPN is controlled by private multinational mass media and business information conglomerate Hearst Communications. As of mid-2024, Hearst Communications retained a stake of 20%.
IPO
When will ESPN IPO?
ESPN doesn't have an IPO on the calendar as of mid-2024. While there were rumors that Disney might spin off the company, Disney CEO Bob Iger has been clear that there are no plans to do so. In 2023, some analysts placed ESPN’s potential valuation in the ballpark of $24 billion. However, with the head of the company putting any ideas of a spinoff to rest for the time being, investors shouldn’t bet on an IPO at any point in the near future.
How to invest
How to buy ESPN stock
You can't currently buy shares of ESPN stock because it isn't publicly traded. However, there are other ways to invest in this business indirectly, as well as other stocks in the entertainment, media, and streaming spaces.
The Walt Disney Company
The Walt Disney Company controls an 80% stake in ESPN. This is just one aspect of a broader portfolio of entertainment properties, including assets like Hulu and Disney+, as well as its studios like Walt Disney Pictures, Marvel Studios, and Lucasfilm. Its other division, Disney Experiences, is known for its parks and experiences, which include cruises, resorts, and vacation clubs.
Warner Bros. Discovery
Warner Bros. Discovery (WBD 1.91%) is another media giant; it was formed by the merger of AT&T (T 0.8%) and Discovery in 2022. In addition to TNT Sports, its lineup of entertainment assets include HBO, Max, Discovery+, DC Comics, and Food Network. The company has dealt with slowdowns in the top and bottom lines in recent years, including fluctuating profitability, although its direct-to-consumer segment has helped bolster revenues.
Netflix
Netflix (NFLX 0.78%) had almost 270 million subscribers worldwide as of early 2024. The company has been generating steady revenue growth and profitability after a tough transition following its surge of growth during the COVID-19 pandemic. Netflix's launch of a cheaper, ad-supported tier was slow to be adopted but has been widely hailed as a success. It is helping drive growth forward along with the expansion of its content offerings.
If you want to buy shares of Disney or another company in the streaming space, there are some important steps to follow.
Step 1: Open a brokerage account
If you want to buy shares of Walt Disney to gain exposure to ESPN or invest in another entertainment company, you need to have a brokerage account. If you don't have one, creating an account takes minutes. Be sure to take the time you need to select the platform that is right for you and your investing goals, preferably one that offers no- or low-cost trades, no account maintenance fees, and few to no account minimums.
Step 2: Figure out your budget
Decide how much money you want to invest to become a part-owner of ESPN through Disney or when considering any other stock you want to buy. Any company you buy should be within the context of a minimum buy-and-hold perspective of five years or more.
Step 3: Do your research
Before you hit the buy button on any stock, you need to research it thoroughly. This takes time, patience, and effort, but it's worth it. Review the company's current balance sheet, financial history, business divisions, how it makes money, and understand if it has a durable runway to growth in the future. Only put your hard-earned cash into shares if you feel that a stock is the right fit for your portfolio.
Step 4: Place an order
If you've already opened and funded your brokerage account, you're just moments away from buying your chosen stocks. Search for the appropriate ticker, which would be DIS for Walt Disney, WBD for Warner Bros. Discovery, or NFLX for Netflix, and fill in the order form that your brokerage provides.
Be sure to specify how many shares you want and whether you want to place a market order or a limit order.
Profitability
Is ESPN profitable?
ESPN has historically been a profitable segment for Disney. The segment has been a significant growth driver for Disney since its acquisition in the 1990s, including providing capital to help fund additional acquisitions.
Disney only started reporting separate figures for ESPN in 2023. The sports network delivered profits just shy of $3 billion in 2022 and $16 billion in revenue that year, which outpaced the performance of the company's entire entertainment division.
In the second quarter of 2024, ESPN brought in total revenue of $4.2 billion, up 3% year-over-year, along with operating income of about $800 million.
Should I invest?
Should I invest in ESPN?
ESPN has historically proven to be one of Disney's more profitable areas, but recent financial reports show that growth has slowed. Changes in consumer viewing patterns, subscriptions, and overall weaknesses in the ad market are afflicting a range of entertainment-centric stocks, and Disney may be no different.
Still, Disney has clear plans for ESPN's expansion. These include a joint venture to create a streaming bundle with Fox Sports, owned by Fox Corporation (FOXA 1.41%), and TNT Sports, a division of Warner Bros. Discovery.
Along with other networks, ESPN is also part of a record $76 billion broadcast deal announced in mid-2024 that will span the next 11 seasons, starting in 2025-26. Disney is also planning to launch a new OTT ESPN streaming service in the fall of 2025 as part of its Disney bundle.
Meanwhile, if you invest in Disney, you're getting much more than a slice of the action at ESPN. With a company whose assets span classic Disney films to the Star Wars franchise to Marvel -- not to mention its resorts and parks -- there's plenty to like about ESPN's parent company and its storied history of succeeding through economics thick and thin.
ETFs
ETFs with exposure to ESPN
Exchange-traded funds (ETFs) can be a good way to own a slice of different companies without buying individual stocks. Although you can't buy ESPN stock, you can invest in ETFs that hold shares of its parent company, Walt Disney.
Notable ETFs with Disney holdings include Vanguard Communication Services ETF (VOX 0.37%), Invesco S&P 500 Equal Weight Communication Services ETF (NYSEMKT:RSPC), and iShares Global Comm Services ETF (IXP 0.38%).
Related investing topics
The bottom line on ESPN
Although investing in ESPN stock isn't an option, you can invest in Walt Disney and gain exposure to this business along with the other household name brands that its parent company controls. Disney is making strides to improve its profitability and revenue growth and has a market-leading lineup of assets that can help it achieve those end goals. Over the long run, Disney can still deliver shareholder value to long-term investors.
FAQ
Investing in ESPN FAQ
Can you invest in ESPN?
You can't invest in ESPN stock, but you can buy shares of its parent company, Walt Disney.
Which company owns ESPN?
Walt Disney owns the majority stake in ESPN with an 80% controlling interest. The remaining 20% is controlled by Hearst Communications.
Is ESPN part of Disney stock?
Yes, ESPN is a division that falls under the entertainment arm of Walt Disney Company.
Is ESPN public or private?
ESPN is a private entity, but is part of the publicly traded Walt Disney Company.
