The battle between Walt Disney Co. and Rupert Murdoch's News Corp. is going global. The rival media empires keep ratcheting up their war to broadcast everything from baseball to soccer in the United States and Europe. Now, they're set to square off over cricket and more in Asia, after dissolving a 16-year partnership. The rising value of sports rights just got another bump.
News Corp. is taking full control of ESPN Star Sports, buying out Disney's 50-per-cent stake in the joint venture. The sports media group generates little earnings and was only valued at its estimated revenue of about $500-million (U.S.), according to Citigroup analysts, an insignificant amount to two companies whose combined market value is some $130-billion. But the figure belies the broader significance of the deal.
Though the United States generates five times the combined pay-TV revenue of China and India, reckons Informa Telecoms and Media, the two Asian countries boast a subscriber base triple the size of America's. Mr. Murdoch seems to be placing a longer-term bet that growing wealth in the region will lead to more spending by consumers to watch sports. The region is also highly fragmented. ESS operates 17 channels in 24 countries across the continent. Places like India, where pay-TV penetration is still low and News Corp. has a strong presence, offer significant room for growth.
Disney isn't exactly throwing in the towel in Asia, however. For now, it says it plans to focus instead on digital businesses like its comprehensive cricket hub ESPNCricinfo, soccer site ESPNFC and ESPN Mobile. But it's hard to believe the competition will end there.
Mr. Murdoch's Sky Sports long dominated the British market for Premier League soccer, but ESPN is shaking up the way the sport is broadcast and is expected by analysts to bid for a package of games in the imminent auction. And Bloomberg reported earlier this year that News Corp., which already has a stable of regional U.S. sports networks, is considering building a national channel to go up against the ESPN powerhouse in America. The Olympics may be the premier worldwide sports competition. But with Disney and News Corp. switching from friend to foe in Asia, a new international competition is under way.