The National Football League’s deal to take a 10% stake in Disney (NYSE:DIS) may have broken the huddle, but deals between entertainment heavyweights and college and sports leagues were already showing signs of acceleration.
Take Fox Sports’ 2025 pickup of IndyCar, including the Indianapolis 500, for $30 million annually, which just generated a 41% viewer increase in its Memorial Day weekend broadcast. Or the Paramount Skydance (NASDAQ:PSKY) and Ultimate Financial Championship (UFC) mid-August $7.7 billion deal that runs through the next seven years.
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Clearly, the days of the legacy broadcast sports are fading in favor of digital streaming service deals.
“In general, we think the upward trajectory in streaming prices will meet some resistance, particularly if the economy weakens,” said Dave Novosel, senior investment analyst, telecom, media, and technology at Gimme Credit in Orland Park, Illinois. “Yet sports are popular enough that consumers may be willing to pay up, even in a softer economic environment, which bodes well for ESPN and its new offering.”
3 Stocks To Watch as Streaming Channels And Sports Strike New Deals
The question for shareholders is not which channel the Eagles and Cowboys will be on to kick off the NFL season in three weeks (it’s NBC and Peacock, by the way), but what the mounting streaming mega-deals mean to big media stocks.
As this process unfolds, these media stocks warrant review by investors as a new era dawns on the sports viewing landscape.
Disney
Year-to-date performance: 4.51%
Disney’s NFL/ESPN deal is a striking example of the new era of sports/media partnerships, raising as many questions as it does answers for investors.
“Disney pulled a ruthless swap in handing the NFL a 10% ESPN stake to swallow NFL Network and RedZone, turning ESPN’s moat into a content super-dam before its $29.99 DTC launch,” said Eric Schiffer, chairman at Reputation Management Consultants in Orange County, California.
The tie-up is a distribution flex that may well vex viewers and Disney shareholders. “The NFL RedZone inside ESPN turbocharges subscriber lifetime value (LTV) and slaps a surcharge on rivals trying to match that Sunday sugar high,” Schiffer said. “Guidance marched higher, as Disney touts stronger profitability.”
The NFL deal should be a great addition for Disney since football is the most valuable content available and has been for decades.
“However, it is also costly, which is why Disney was willing to give up a 10% stake,” Novosel said. “The deal should support further revenue growth at ESPN, but may not add to margins because of costs involved. Furthermore, the Disney experiences segment generates twice as much revenue and more than three times as much operating income as the ESPN segment. So, the financial impact is muted to a certain extent.”
Paramount Skydance
Year-to-date performance: 36.71%
CNBC’s Jim Cramer made news last week, calling Paramount Skydance a “meme stock” in the immediate aftermath of its merger with Skydance Media.
The deal, which closed on August 7, molds both media giants into Paramount Skydance Corporation. Skydance is doing most of the heavy lifting, purchasing National Amusements for $2.4 billion, shelling out $4.5 billion to Paramount shareholders, and pouring $1.5 billion into Paramount’s balance sheet. Skydance founder David Ellison also assumes the PSKY CEO position.
The company’s $7.7 billion deal with TKO Group Holdings, which operates the UFC, breaks down to $1.1 billion annually and launches in 2026. Under the deal terms, Paramount Skydance now holds the exclusive media rights to all UFC events, including the popular “Fight Nights” events and the UFC’s numbered events, which routinely draw large audiences. All UFC events will be shown on the Paramount+ streaming platform.
Sector analysts are on board, with PSKY landing a massive viewer subscription base and an estimated $300 million in annualized advertising revenues.
“We view today’s UFC rights agreement (and interest in future international rights) as a meaningful indication of the company’s strategy to bolster its sports and streaming assets,” stated Guggenheim analyst Michael Morris in a new research note.
Amazon
Year-to-date performance: 5.57%
Amazon’s (NASDAQ:AMZN) Prime service has also made a big splash in the sports streaming space with its rising NFL streaming service, which company CEO Andy Jassy hopes to pull Prime into the black in 2026. Amazon has invested $3 billion annually in streaming sports content, with a particular focus on the NFL and the NBA.
In 2024, Amazon was among a group including Disney/ESPN and NBC Universal to land NBA games via an 11-year, $77 billion deal with the league. Meanwhile, it accelerates its existing NFL deal to exclusive NFL game broadcasts, showing 16 Thursday night games along with a Black Friday and wild-card playoff game in the new year. In August 2024, Amazon Prime signed a $100 million deal with the Kelce brothers for their popular sports podcast, further embedding itself in the NFL ecosystem.
“Amazon is an ironclad flywheel in the streaming market, with ad-free surcharges, deep pockets, and live-sports ambitions which will keep Prime Video in the monetization slipstream,” Schiffer said.
Amazon Prime ceded some ground to rival Alphabet (NASDAQ:GOOG), which landed the popular NFL Ticket package, which Schiffer cited as “formidable” in the combative NFL viewing landscape. Big hedge funds are increasingly bullish on AMZN shares, with Tiger Global Management hiking its share allotment by 62.2% in the second quarter of 2025, according to its latest 13F filing.
Editorial content from our expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.
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