Season 4, Episode 1: ESPN

**Ben Gilbert** (0:00)
And to David, I'm kind of sick of the old theme music, and to be completely honest, I never really liked it. Welcome to season four, episode one of Acquired, the podcast about technology acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:25)
I'm David Rosenthal.

**Ben Gilbert** (0:26)
And we are your hosts. Today we are covering a company that is absolutely synonymous with sports, ESPN.

**David Rosenthal** (0:33)
The worldwide leader.

**Ben Gilbert** (0:34)
Indeed, and as they say in the very first moments of their 1979 broadcast, if you're a fan, if you're a fan, what you'll see in the next minutes, hours and days to follow may convince you you've gone to sports heaven.

**David Rosenthal** (0:50)
Indeed. Acquired has gone to sports heaven.

**Ben Gilbert** (0:53)
It was obligatory. For long time listeners of the show, you know that we cover typically one acquisition, and then we talk about it, and we grade it, and we have a pretty standard format. This episode covers not one acquisition, but three, each one fairly monumental, and I want to outline what that's going to be so that the story has a little bit of structure to it. As I mentioned, the first broadcast was in 79 ESPN was acquired by ABC in 1984 Just one year later, in a surprising turn of events, the smaller Capital Cities Broadcasting Corporation incredibly bought ABC, took its name, and got ESPN along with it. And then finally, in 1996, 95, 96, there was a $19 billion buyout of ABC by the one and only Disney.

**David Rosenthal** (1:44)
And a little teaser, the Capital Cities acquisition had a little help on the way from a certain Oracle in Omaha that we'll get into.

**Ben Gilbert** (1:52)
Excited to dive into that. So as David was pointing out to me when I was sort of teeing up, how should we introduce this, the through line and the most important part of all of this, these acquisitions that each sort of included ESPN, was ESPN itself. And so much so that by 2006, a UBS estimate was that ESPN alone was worth 40% of Disney's total value.

**David Rosenthal** (2:14)
Yeah. I love the UBS estimate, man. That was like, that was right before I joined UBS.

**Ben Gilbert** (2:20)
Oh, well, it could, it definitely wasn't accurate then, because you weren't there.

**David Rosenthal** (2:24)
Yeah, not yet a David Rosenthal estimate, but would have been two years later.

**Ben Gilbert** (2:29)
Indeed. So this episode will largely focus on ESPN through the mid-90s and the sort of digital and streaming eras are a whole nother story that we'll need to tell at some point. But this era of ESPN and its sort of rise to truly be the worldwide leader in sports really deserves its own episode that we're going to dive into today. Speaking of ESPN and Inside Baseball, yes, pun definitely intended. We did a really fun limited partner bonus show last week. We took our LPs behind the curtains of how VC firms really work from corporate structure to incentives. If you're interested or just want to support the show, you can click the link in the show notes to become a prestigious Acquired LP, or go to kimberlite.fm slash acquired. If you're new to the show, you should check out our Slack at acquired.fm. It is full of brilliant people that are providing their hot takes on the tech news of the day, often M&A and IPO related, and is also just a really great, really helpful, really friendly community. I've really enjoyed, particularly over the last month or so, we've been on break over the holidays, just getting to chat with folks in there has been really cool.
This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (3:41)
So Crusoe, as listeners know by now, is a clean compute cloud provider, specifically built for AI workloads. NVIDIA is one of their major partners, and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (4:07)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (4:12)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, et cetera, and uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (4:30)