Yahoo Finance·2026-02-09 09:40Core Viewpoint - The potential $72 billion acquisition of Warner Bros. Discovery by Netflix is uncertain due to antitrust challenges and competition, prompting speculation about alternative strategies, such as acquiring ESPN from Disney if the deal fails [1][2]. Group 1: Netflix and Warner Bros. Discovery Deal - The acquisition deal for Warner Bros. Discovery is valued at $72 billion, which increases to approximately $83 billion when including assumed debt [1]. - Antitrust hurdles exist for Netflix, particularly in Europe, complicating the acquisition process [2]. - The deal's uncertainty raises questions about whether Netflix should consider other options, such as acquiring ESPN from Disney [2]. Group 2: ESPN Ownership and Disney's Stake - Disney previously owned 80% of ESPN, but after selling a 10% stake to the NFL, its ownership has been reduced to 72%, while Hearst Broadcasting now holds 18% [3]. - The sports programming business, led by ESPN, is underperforming, contributing less than 19% of Disney's $94.4 billion revenue in fiscal 2025 and only 16% of its segment operating income [6]. - ESPN's latest quarter showed only a 1% year-over-year revenue increase, alongside a 25% decline in segment operating profit, indicating financial strain [6]. Group 3: Disney's Strategic Considerations - Disney faces increasing costs for sports rights, making ownership burdensome compared to its other segments like theme parks and studio productions [4][5]. - Selling ESPN could improve Disney's margins significantly, especially if Netflix is willing to pay a premium similar to that for Warner Bros. Discovery [6]. - The upcoming leadership change with Josh D'Amaro becoming Disney's new CEO may lead to significant strategic decisions regarding ESPN [6].