In what may be the biggest and most revolutionary development in the history of streaming sports, ESPN, Fox and Warner Bros. Discovery announced that they’ve reached an understanding on the outlines of a new Joint Venture (JV) to launch a new streaming sports service.
The platform would bring together the companies’ portfolios of sports networks, certain direct-to-consumer (DTC) sports services and sports rights – including content from all the major professional sports leagues and college sports.
While the formation of the pay service is still subject to the negotiation of definitive agreements amongst the parties, the companies said that they plan to launch the service in the fall of 2024 and that it would be made available directly to consumers via a new app. Subscribers would also have the ability to bundle the product with other services, including with Disney+, Hulu and/or Max.
The platform would aggregate content from NFL, NBA, WNBA, MLB, NHL, NASCAR, College Sports, UFC, PGA TOUR Golf, Grand Slam Tennis, the FIFA World Cup, Cycling and much more, the companies said.
It would also provide subscribers to an all-in-one premier sports service that would give fans access to linear sports networks including ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, Fox, FS1, FS2, BTN, TNT, TBS, truTV, as well as ESPN+.
Each of the three companies would own one third of the joint venture. More details, including pricing and the name of the service, will be announced at a later date, the companies said.
The service would have a new brand with an independent management team, the companies also noted.
The news comes after months of intense speculation regarding the future of ESPN and high profile sports in the streaming arena. A number of reports have suggested that ESPN, which is 80% owned by Disney, was looking for a potential partner to help it build a sports streaming service that would dominate the streaming landscape the way ESPN dominated sports in the pay TV world.
Much of this speculation did not, however, imagine such a widespread partnership that would bring together so many high profile sports and networks.
In announcing the deal, Bob Iger, CEO of The Walt Disney Company said, “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. 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.”
This is a blockbuster deal that will further decimate the traditional US pay-TV sector."
Tammy Parker, GlobalData
“We’re pumped to bring the Fox Sports portfolio to this new and exciting platform. We believe the service will provide passionate fans outside of the traditional bundle an array of amazing sports content all in one place,” added Lachlan Murdoch, executive chair and chief executive officer of Fox said
“At WBD, 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,” said David Zaslav, CEO of Warner Bros. Discovery. “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.”
Tammy Parker, principal analyst at GlobatData sees the announcement as a major warning sign for traditional TV.
“This is a blockbuster deal that will further decimate the traditional US pay-TV sector," Parker said. "For many viewers, sports has been the thread keeping them attached to pay-TV, but that thread frays a bit more every time a streaming video provider gains control of popular live sports programming. Having ESPN, Fox, and WarnerBros. Discovery combine their vast portfolios of sports content into a single streaming service will make sports fans think twice about subscribing to pricey linear programming bundles offered by cable and satellite TV providers. The lure of an all-in-one app with a smorgasbord of appealing sports content will be tough for sports fans to resist.
“One big question revolves around pricing for the still-unnamed service, especially given how expensive sports rights are," she added. "The standalone app might cost more than potential viewers are willing to pay. However, subscribers will have the option to bundle the new service with Disney, Hulu and/or Max, and will thus be able to take advantage of discounted value pricing for a full package of streaming services.
“The new sports service will be positioned to build a healthy subscriber base quickly. In addition to siphoning off subscribers from cable and satellite TV providers, which are considered multichannel video programming distributors (MVPDs), it will also pose a significant threat to other sports-oriented streaming services, such as FuboTV, a virtual MVPD with a focus on live sports," she concluded.
