Walt Disneyis ESPN, Fox And Warner Bros. Discovery plan to launch a joint sports streaming service this fall, giving consumers a new way to access top live sports for the first time, the companies said Tuesday.
The platform, which will be owned by a newly founded company with its own management team, does not yet have a name or price. Disney, Fox and Warner Bros. Discovery will each own a third of the shares.
Consumers could sign up directly via a new app. Subscribers would also have the option to bundle the product with the companies’ streaming platforms Disney+, Hulu and Max.
The product will be a thinner bundle of linear networks than a standard cable offering, tailored specifically to sports fans. It will include all Disney, Fox and Warner Bros. Discovery broadcast and cable networks that carry sports, as well as ESPN+.
From Disney, this includes ESPN and its sister networks such as ESPN2, ESPNU, SECN, ACCN, ESPNEWS, as well as the ABC Broadcast Network. Warner Bros. Discovery’s sports channels are TNT, TBS and TruTV. In addition to FS1, FS2 and BTN, Fox will also include the Fox channel.
Although no price has been set yet, a logical starting point could be $45 or $50 per month, with lower introductory prices to attract sign-ups, according to a person familiar with the matter, who asked not to be named because the Discussions surrounding the service were confidential. A second person added that even with promotional pricing, the service would cost more than $30 per month.
The companies’ longer-term goal is to make the platform a home base for sports programming. Hypothetically, independent networks like The Tennis Channel could be added to improve offerings, one of the people said. While Disney, Warner Bros. Discovery and Fox will each own a third of the company, the division of revenue from rights fees will be proportional to what the cable networks charge pay-TV providers, a second person said.
“The launch of this new streaming sports service is a significant moment for Disney and ESPN, a big win for sports fans and an important step forward for the media business,” Disney CEO Bob Iger said in a statement. “This means consumers will have the full range of ESPN channels available to them, alongside sports programming from other industry leaders, as part of a differentiated, sports-focused service.”
The launch of the product will not stop ESPN from offering a full direct-to-consumer streaming product, which Disney is still researching and is scheduled to launch by 2025, according to a person familiar with the matter. ESPN previously said it would launch this product this year or next.
The rivals expect to launch the joint service at a time when the value of sports media rights is soaring and viewers have turned away from traditional cable television, even as ratings for the National Football League and National Basketball Association have plummeted have shot up.
“While we look forward to learning more about this new venture, we are encouraged by the opportunity to make premium sports content more accessible to fans who are not subscribers to the traditional cable or satellite package,” an NBA spokesperson said.
ComcastNBCUniversal and Paramount Global have not been approached to be part of the joint venture, according to people familiar with the matter. One of the respondents said NBCUniversal would likely have balked at the idea of unbundling its sports channels from its other entertainment cable channels.
Still, the new thin package could reduce the number of cable subscribers for both NBCUniversal and NBCUniversal Paramount Global. Both companies offer streaming services — Peacock and Paramount+ — that offer additional sports, including live National Football League games. This can mitigate potential revenue losses for NBCUniversal and Paramount Global.
Disney in particular has been looking for new ways to reinvent the sports business and ESPN, including seeking strategic partners such as the National Football League and the National Basketball League.
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2024-02-07 02:36:48
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