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ESPN-StarSports Splits: NewsCorp Will Buy ESPN’s 50% Stake

It’s been rumored for a while, and now it’s official: the 16 year old ESPN-StarSports joint venture is splitting, with News Corporation buying ESPN’s 50% equity stake in ESPN STAR Sports (ESS). The amount that NewsCorp is paying for the stake has not been disclosed, and the transaction is subject to regulatory approvals. Following the transaction, NewsCorp will own all of ESS businesses, which primarily broadcast sports in Asia, including India. The Lowdown:

– Manu Sawhney, Managing Director of ESS, is moving on. He will hand over to Peter Hutton, currently SVP of Sports for FOX International Channels (FIC), by August 31st 2010. Hutton will report to the ESS Board.
– Until the transaction is complete, ESS will be jointly managed both companies. The ESS JV also was responsible for webstreaming Cricket matches in India, and the JV had just renewed its multi-platform deal with the England and Wales Cricket Board.
– ESPN To Focus On Digital: ESPN will operate independently, with Disney’s support. ESPN owns popular Cricket site ESPNCricinfo (rather, Cricinfo), which has been operating independently, and in a statement, John Skipper, President of ESPN and Co-Chairman, Disney Media Networks says that the business will continue to “serve Asian sports fans through ESPN-branded digital businesses like ESPNCricinfo, the leading digital cricket brand in the world, ESPNFC and ESPN Mobile.”

Quick Take

It’s strange that the statement from John Skipper mentions only digital properties, and makes no mention of any broadcast businesses or plans. ESPN also has its channel running in India, albeit managed by ESS: what happens to that? Will there be three sports channels from the STAR stable – Star Sports, Star Cricket and the channel currently branded as ESPN? We’re wondering if there a non-compete agreement between News Corp and Disney.

The other side to this deal is that given that ESS will have only one master, it will have far more flexibility in terms of bidding for rights, but whether Peter Hutton will be able to operate in the complicated Indian market at the same speed remains to be seen.

Also note that Disney has expanded its presence in India by acquiring UTV, and UTV has a fairly comprehensive broadcast business in place. So will we see UTV launch ESPN in India?

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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