February 8, 2024
ESPN, Fox, and Warner Bros./Discovery are teaming up to create a supersize sports-streaming service that will offer content from all major leagues—a deal that will reshape the sports and media landscape, reports The Wall Street Journal.
The as-yet-unnamed service will be offered directly to consumers, who will be able to stream all of these companies’ sports content, the companies said in a statement, following a report in the Journal about the new venture.
The chief executives of Fox, Warner Bros. /Discovery, and Disney—ESPN’s majority owner—said the new offering would increase choice for fans and give a new sports-centric service to those who have cut the cord to traditional pay-TV.
The deal marks a milestone in the growth of the streaming industry and could accelerate consumers’ shift away from cable TV. Sports has long been the key attraction of cable, the glue holding the old-school “bundle” together.
Media companies have been hesitant to offer their most-valuable sports properties—such as National Football League, National Basketball Association and Major League Baseball games—outside the high-price traditional cable package, which has made watching sports exclusively on streaming platforms particularly complex.
Now, as pay television’s decline accelerates because of cord-cutting, companies such as ESPN, Warner, and Fox are seeing the writing on the wall and shifting their bets to the streaming world, as the creation of the new venture shows.
For Disney, the partnership with other networks adds to an array of strategic options that the company has explored for ESPN. Disney is still looking for a potential strategic partner or investor and will maintain a plan to offer a stand-alone ESPN streaming app for those who don’t want the all-in-one bundle from the three companies, people close to the situation said.
There are risks to the tie-up. Disney knows as well as any the perils of a joint venture in media. It is now in the middle of trying to end its joint ownership of Hulu by buying out its partner, Comcast, after years of difficulties.
Also, the new service won’t include content from Paramount Global’s CBS or Comcast’s NBCUniversal.
A chief executive for the venture is expected to be named in the coming weeks, people familiar with the matter said. While no price tag has been set, it is expected to be significantly lower than the typical cable bundle, which often can run north of $100 a month.
The leagues weren’t informed of the talks to create the new sports-streaming platform, people familiar with the matter said.
The new service comes as ESPN and Warner Bros. Discovery’s TNT are both renegotiating their rights packages with the NBA, one of their most valuable assets. Some experts expect the NBA to command three times its last deal, which would mean a deal of about $78 billion over a decade.
Research contact: @WSJ
