Some of the biggest companies in the television sports business — Fox, The Walt Disney Co.’s ESPN and Warner Bros. Discovery — are teaming up to create a jointly owned platform that would stream their sports assets and make it easier for fans to find the games they want to watch.
The deal comes at a time when broadcast and cable companies are worried about not being able to afford sports, which draw the biggest ratings on TV.
Streaming companies are grabbing rights to more and more sports and live events, from Thursday Night Football on Prime Video to WWE Monday Night Raw on Netflix.
By subscribing to the new standalone app under development, sports fans would have access to the linear sports networks including ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNews ABC, Fox, FS1, FS2, BTN, TNT, TBS, truTV, as well as ESPN Plus.
The app will carry content from the NFL, NBA, WNBA, MLB, NHL, NASCAR, major college sports, UFC, the PGA Tour, Grand Slam tennis, the FIFA World Cup and cycling.
The partners are hoping to get the new app up and running by the fall, in time for football season.
The venture will operate like a virtual multichannel video programming distributor (vMPVD) and pay sub fees for the networks it carries.
That means that while the partners share in the venture’s profits and losses, each media company will generate revenues based on the sub fees of the networks included in the new skinny sports bundle.
That means that Disney–with ESPN and ABC in the mix–will probably generate more revenue than WBD, whose CNN and HBO won’t be in the package, or Fox, which won’t be getting paid for Fox News Channel.
Because Fox, Disney and WBD are essentially selling existing channels to a new distributor, their deals with the sports leagues did not need to be renegotiated.
In the future each of the partners will continue to negotiate sports rights for their own networks. They do not plan to combine resources to bid for increasingly expensive sports rights, according to a source familiar with the deal.
The companies did not disclose a price point for the service, but some sources said it is expected to be in the $50 a month ballpark–less than other MVPDs with more entertainment programming.
With the new venture carrying the ABC and Fox broadcasting networks, its unclear how local programming will be addressed.
“The launch of this new streaming sports service is a significant moment for Disney and ESPN, a major win for sports fans, and an important step forward for the media business,” Disney CEO Bob Iger said. “This means the full suite of ESPN channels will be available to consumers alongside the sports programming of other industry leaders as part of a differentiated sports-centric service. I’m grateful to Jimmy Pitaro and the team at ESPN, who are at the forefront of innovating on behalf of consumers to create new offerings with more choice and greater value.”
Disney has been trying to figure out the streaming future of ESPN and has been talking about ESPN going direct-to-consumer at some point in the near future. The DTC version of ESPN will give subscribers access to ESPN’s linear channels in an even skinnier bundle. It is also likely to have personalization, betting and fantasy features that will distinguish it from both ESPN Plus and the new sports joint venture.
“We’re pumped to bring the Fox Sports portfolio to this new and exciting platform,” Fox Corp. CEO Lachlan Murdoch said. “We believe the service will provide passionate fans outside of the traditional bundle an array of amazing sports content all in one place.”
Added WBD CEO David Zaslav: “At Warner Bros Discovery, our ambition is always to connect our leading content and brands with as many viewers as possible, and this exciting joint venture and the unparalleled combination of marquee sports rights and access to the greatest sporting events in the world allows us to do just that. This new sports service exemplifies our ability as an industry to drive innovation and provide consumers with more choice, enjoyment and value and we’re thrilled to deliver it to sports fans.”
The new venture would be one-third owned by Fox, ESPN and Warner Bros. Discovery. It will be run by an independent management team reporting to a board that will have equal representation from its owners.
According to someone familiar with the situation, Comcast NBCUniversal and Paramount Global, which also hold substantial sports rights, were not asked to participate in the discussions that led to the joint venture. It is unclear if they would be able join if that was something they wanted.
A list of sports properties that could be offered by the new joint venture:
