The worldwide leader in sports is also the worldwide leader in media.
Kurt Badenhausen of Forbes notes in a column that according to a recent valuation analysis done by Wunderlich Securities research analyst Matthew Harrigan, ESPN is worth around $50.8 billion.
That makes ESPN the most valuable media property owned by Disney. By comparison the ABC Network, also owned by Disney, is thought to be worth about $3.2 billion.
The $50.8 billion price tag also means ESPN is the world's most valuable media company and on its own would be one of the top 100 publicly traded companies.
ESPN did all this without ever broadcasting an NFL playoff game, which is one of the most valuable properties around. Fox, CBS and NBC had those games cornered until the upcoming season, when ESPN will get the first wild card game of its $15.2 billion deal with the NFL.
An insatiable appetite for sports has helped ESPN become a behemoth, and that hunger is reflected in its affiliate fees. These fees, which account for about 70 percent of ESPN's revenue, amount to the network's share of the subscription fee for a certain cable or satellite operator.
Because of ESPN's near monopoly on the sports market, distributors like Comcast, Time Warner Cable and DirecTV would never think of offering a package without the network. In that sense, ESPN holds the distributors captive and can jack up its distributor fees to three or four times what other channels charge. This means ESPN charges the distributors a rate based on total subscribers, not just those who happen to watch the network. In other words, ESPN is making a lot of money from non-sports fans.
Badenhausen has more details:
"ESPN’s advantage over its network and cable brethren lies in the affiliate fee and ad revenue model that generates huge sums of cash. ESPN's average monthly affiliate fee was $5.54 in 2013, according to SNL Kagan. The next highest national cable channel was TNT at $1.33, followed by Disney Channel at $1.15 and $1.13 for the NFL Network. ESPN2 is not far behind at $0.70 with ESPNews, ESPN Classic, ESPNU and ESPN Deportes each around $0.20 a month says SNL Kagan."
Partially as a result of these fees, ESPN generated $4.5 billion for Disney this year, a 39 percent increase from five years ago. CBS, the highest rated broadcast network, had an operating income of $1.6 billion in 2013.
Matt Yoder of Awful Announcing points out that ESPN's value has risen astronomically, and just a year and a half ago it was worth $40 billion. So despite a more crowded market, which includes the entrance of a direct competitor in Fox Sports 1, ESPN has somehow managed to become worth more than the combined value of every NFL and NHL team.
Impressive, to say the least.