Yahoo News Disney, Fox And Warner Bros. Discovery Team On Sports Streaming Venture
Disney, Fox and Warner Bros. Discovery are teaming up for a sports streaming venture set to launch this fall.
Details (notably including the price) are still coming into focus about the outlet, which will pool the resources of three of the top owners of sports rights. The new venture is designed to preserve the linear TV feed, with programming being provided on a non-exclusive basis. That could prevent more uneasiness among viewers and pay-TV operators, who are in an unsettled state lately about their favorite action steadily shifting online.
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An announcement from the three companies said the venture will feature the NFL and other major professional sports leagues, plus tennis grand slams, combat sports and college games. Made available directly to consumers via a separate app, the new service will also be able to be bundled with Disney+, Hulu and/or Max.
NBCUniversal, which is not part of the venture, recently saw positive results from its streaming-only carriage of an NFL wild-card playoff game last month. The company declared its audience of 23 million viewers on Peacock made the game the most streamed event in U.S. history, helping justify the reported fee of $110 million for the rights to the game.
Along with NBCU, which has rights to the NFL, the Premier League, Major League Baseball, Paramount Global is also missing from the new venture. Paramount’s rights portfolio includes the NFL, NCAA Men’s Basketball, the PGA Tour and soccer’s Champions League.
Fox, Disney and WBD had been discussing the notion of a team-up in recent months, people familiar with those talks have told Deadline. The effort to band together is an acknowledgement of the increasing pressure being applied on traditional media companies by cord-cutting as well as deep-pocketed tech companies taking a closer look at sports.
Amazon has locked up long-term exclusive rights to NFL Thursday Night Football and also streams MLB and a other live sports on Prime Video. Apple has also gotten into business with MLB and also formed a venture with Major League Soccer. YouTube recently took over NFL Sunday Ticket in a $14 billion deal. Netflix has also been making moves toward a full embrace of sports, the most recent sign being a 10-year, $5 billion pact for the WWE’s sports-adjacent Raw franchise. It made a bid for Formula 1 rights in 2022, motivated in part by the breakout success of its behind-the-scenes F1 series Drive to Survive.
The notion of a JV is a particularly interesting development for Disney, given its recent buyout of Comcast’s financial stake in Hulu and also its development of a stand-alone version of ESPN that will be more robust than ESPN+. Those efforts, in tandem with a quest to find a outside partner to help with distribution (possibly a top-tier league like the NBA or NFL), are continuing, with the new ESPN product expected in the next year or so. In the official announcement of the JV, Disney CEO Bob Iger noted that “the full suite of ESPN channels will be available to consumers alongside the sports programming of other industry leaders” on the new app.
It’s not clear what kind of price point will be required in order to support the range of high-priced programming ticketed for the new joint service, but it appears certain to test the outer limits of what many streaming consumers are accustomed to paying. Over the past year or two, a number of regional sports services costing upwards of $20 per month have launched but gained minimal traction. Of course, cord-cutting has also been accelerating at a rate approaching 7% in the fourth quarter, a development that has leeched away valuable sources of income for sports rights holders paying escalating rates for many properties.
Of the three partners in the JV, Fox is the least encumbered in terms of needing to feed its streaming portfolio. The free, ad-supported service Tubi, which Fox acquired in 2020, mostly carries on-demand titles. Live viewing on other Fox streaming platforms generally requires users to authenticate that they have a pay-TV subscription.
In the official announcement, the CEOs of the three founding companies all rhapsodized about its potential. Iger called the JV “a significant moment for Disney and ESPN, a major win for sports fans, and an important step forward for the media business.” He saluted ESPN Chairman Jimmy Pitaro and other ESPN execs for “innovating on behalf of consumers to create new offerings with more choice and greater value.”
Fox’s Lachlan Murdoch said the company is “pumped” be part of the new entity. “We believe the service will provide passionate fans outside of the traditional bundle an array of amazing sports content all in one place,” he said. WBD’s David Zaslav said the new 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.”
More will undoubtedly be said about the venture on Wednesday, when both Fox and Disney report their quarterly earnings.
The Wall Street Journal had the first report of the joint venture.
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