Fox, The Walt Disney Co.’s ESPN, and Warner Bros. Discovery are collaborating to build a jointly owned platform that will stream their sports assets and help viewers find the events they want to watch.
The agreement comes at a time when broadcast and cable companies are concerned about being unable to afford sports, which generate the highest viewership on television.
Streaming businesses are acquiring rights to an increasing number of sports and live events, like Thursday Night Football on Prime Video and WWE Monday Night Raw on Netflix.
Sports fans who subscribe to the new standalone app under construction will have access to linear sports networks such as ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNews ABC, Fox, FS1, FS2, BTN, TNT, TBS, truTV, and ESPN Plus.
The app will have material from the NFL, NBA, WNBA, MLB, NHL, NASCAR, major college sports, UFC, the PGA Tour, Grand Slam tennis, the FIFA World Cup, and cycling.
READ MORE: WBD, ESPN, And Fox Will Launch Sports Streaming Services
The partners hope to launch the new app in the autumn, just in time for football season.
The firm will function as a virtual multichannel video programming distributor (vMPVD), paying sub-fees for the networks it distributes.
That is, while the partners share in the venture’s profits and losses, each media business will generate money based on the networks’ sub fees in the new skinny sports bundle.
READ MORE: Disney, Warners, And Fox Plan Sports Streaming Platform Combining Coverage In A Major Partnership
That means Disney, with ESPN and ABC in the mix, will most likely make more revenue than WBD, which will not include CNN and HBO, or Fox, which will not be paid for Fox News Channel.
Because Fox, Disney, and WBD are effectively selling existing channels to a new distributor, their contracts with the sports leagues did not require renegotiation.
In the future, each of the partners will continue to negotiate sports rights for their individual networks. According to a source acquainted with the situation, they do not intend to pool their resources in order to compete for increasingly expensive sports rights.
The firms did not provide a price for the service, but some sources indicated it is expected to cost around $50 per month, which is less than other MVPDs with more entertainment programming.
With the new partnership carrying the ABC and Fox broadcasting networks, it’s unclear how local programming will be handled.
“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,” Bob Iger, president and CEO of Disney, stated. “This implies that consumers will have access to the entire ESPN channel lineup, as well as other industry leaders’ sports programming, as part of a differentiated sports-centric package. I’m grateful to Jimmy Pitaro and the ESPN team for leading the way in innovating on behalf of customers, creating new options with more choice and more value.”
Disney has been trying to figure out ESPN’s streaming future, and there has been speculation of ESPN going direct-to-consumer in the near future. ESPN’s DTC version will provide users with access to the network’s linear channels in an even smaller bundle. It is also likely to include personalization, betting, and fantasy aspects that set it apart from 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.”
WBD CEO David Zaslav added, “At Warner Bros Discovery, our goal is always to connect our leading content and brands with as many viewers as possible, and this exciting joint venture, with its unparalleled combination of marquee sports rights and access to the world’s greatest sporting events, allows us to do just that.” This new sports service demonstrates our industry’s ability to drive innovation and provide consumers with more choice, enjoyment, and value, and we’re excited to bring it to sports lovers.”
Fox, ESPN, and Warner Bros. Discovery will each own one-third of the new business. It will be led by an independent management team who will report to a board with equal representation from its owners.
According to a source familiar with the issue, Comcast NBCUniversal and Paramount Global, which also own significant sports rights, were not invited to participate in the conversations that led to the partnership. If they chose to join, it is uncertain whether they would be able to do so.
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