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By Richard Deitsch, Mike Vorkunov, Andrew Marchand and Greg Rosenstein
ESPN, FOX and Warner Bros. Discovery are forming a new joint venture to launch a sports streaming service in the fall of 2024, they announced Tuesday. This will include the companies’ sports network portfolios, certain direct-to-consumer sports services and sports rights.
Subscribers will have access to linear sports networks including ESPN, ESPN2, ESPNU, SEC Network, ACC Network, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS, truTV and ESPN+. It can also be combined with Disney+, Hulu and/or Max.
“The launch of this new sports streaming service is a significant moment for Disney and ESPN, a huge win for sports fans and a major step forward for the media business,” said Bob Iger, CEO of The Walt Disney Company, in a statement. . “This means that ESPN’s full suite of channels will be available to consumers alongside sports programming from other industry leaders as part of a differentiated sports-focused service. “I am grateful to Jimmy Pitaro and the team at ESPN, who are at the forefront of innovation on behalf of consumers to create new offerings with more choice and greater value.”
David Zaslav, CEO of Warner Bros. Discovery, added: “At WBD, our ambition is always to connect our leading content and brands to as many viewers as possible, and this exciting joint venture and unparalleled combination of marquee sports rights and access to the world’s biggest sporting events 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 are delighted to offer it to sports fans.”
Pricing will be announced at a later date, according to the release.
What will it mean for consumers?
That’s the biggest question at hand and we’ll learn more about this as more details come out. One of the most important questions for me is what will be the price of such a product? In theory, as a practical matter, giving sports fans the opportunity to purchase these major sports properties outright without having to pay for an entertainment component is a potential game-changer.
As for the price of the joint sports streaming service, which will be most important to consumers, the joint venture has not yet finished its research on where it will land. But as a guide, according to those briefed on the deal, it will most likely be priced somewhere between what an independent RSN might charge for its monthly offering (think $20-30 monthly depending on where you live) or what I could pay for the package. services (think $75 and up). Could that mean between $50 and $55? we will learn soon.— Richard Deitsch, media reporter
What is the name of this new venture?
For now there is no formal name for the joint venture (they are in the lab formulating names), but that will be a big deal when it goes to market. Don’t hesitate to send your suggestions; you may receive a finder’s fee. — Deitsch
What will it mean for ESPN, FOX and Warner Bros. Discovery?
While the deal between ESPN, Warner Bros. Discovery and Fox Sports is important, it is not, at least not yet, the complete solution for sports fans. After a year of talks between the three entities, fans will be given another option to purchase sports. Without CBS, NBC and Amazon, among others, it’s not the end of a sports viewing buffet in one place.
On the business side, the deal is a one-third ownership split between ESPN, WBD Sports and Fox, however the fees each company will receive are based on what they earn on their cable deals and with services, such as YouTube TV , according to sources with knowledge of the agreement. This means that ESPN, which receives the highest fees, will receive a higher percentage of each subscriber to the new venture.
It’s also just the leadoff hitter for ESPN’s direct-to-consumer offerings. It still plans to bring its mothership, ESPN, direct to consumer on its own next year, according to sources with knowledge of the deal. ESPN will continue to be offered on cable. In its most recent projections, ESPN+ will be priced between $25 and $30 per month. The new entity of ESPN, WBD and Fox does not yet have a price.
ESPN is also continuing talks with the NFL, other leagues and major digital players about potential partnerships, according to sources with knowledge of the deal.
For Fox, this is its first step into the paid sports subscription service, as it has zigged as its competitors entered the space. It is a small step that really has no inconvenience for the company. WBD Sports will continue with its plans with MAX, where it already offers all its sports content.
While the company will have its own management team, including a CEO, it will not compete, at least for now, for the rights as a single entity. In the end, this is basically similar to a sports company similar to Hulu. It might be a solution for some cord cutters, but it’s not the end all be all, for now. — Andrew Marchand, Senior Sports Media Columnist
The announcement comes at an interesting time.
That this is launching just months before the NBA brings its next media rights deal to market is certainly an interesting time for the league. Two potential bidders for parts of its rights package have just agreed to a joint venture to broadcast those games starting next fall. WBD and Disney will continue to have their exclusivity on linear channels, so it is not as if it were a single channel that absorbs their games. But now there is a one-stop shop for consumers to watch NBA games and share the revenue and costs of doing so.
What will be the impact of this on the rights fees the NBA receives? I think in some ways the NBA might be happy because it wants to make its games more accessible and less divisive and this new DTC app will at least allow fans to find a good number of nationally televised games in one place . — Mike Vorkunov, national basketball business reporter
Required reading
(Photo: Erica Denhoff / Icon Sportswire via Getty Images)