Fox, Disney and Warner Bros. Discovery to launch sports streamer - Los Angeles Times
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Fox, Disney and Warner Bros. Discovery are launching a joint sports streaming service

A basketball player in a white jersey is fouled by one wearing a black jersey. Behind them is a third player.
LeBron James of the Los Angeles Lakers is fouled by Draymond Green of the Golden State Warriors.
(Ezra Shaw / Getty Images)
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In a potentially game-changing move for the TV business, Fox Corp., Walt Disney Co. and Warner Bros. Discovery are entering a joint venture that will make their sports content available in a single new streaming service.

The still-to-be-named service is expected to launch in the fall, the companies said Tuesday in a statement. The platform’s pricing and an independent management team are yet to be announced. Each of the media giants will have a one-third stake in the venture.

The service will provide one-stop shopping for sports fans, giving them the ability to stream NFL games, the NCAA men’s basketball tournament, the NHL, the NBA and Major League Baseball, which represents a sampling of the media rights owned by the three partners. It will also provide the linear sports channels currently available only with a traditional pay TV subscription.

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Although no pricing was mentioned in the announcement, the channels involved make it likely that it will be competitive to streaming replacements for cable and satellite, such as YouTube TV and Sling. A YouTube TV subscription currently starts at $72.99 a month.

All of ESPN’s channels will be offered on the service — making them available for the first time to consumers who don’t have traditional pay TV bundles. Fox, Fox Sports, ABC, TNT and TruTV will also be included in the streaming package.

“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,” Disney Chief Executive Bob Iger said in a statement. “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.”

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As the universe of cable homes gets smaller, teams are turning back to broadcast channels to reach more fans.

Oct. 11, 2023

ESPN still plans to launch its own direct-to-consumer streaming product for its linear channels in 2025. Like the new venture that Disney will join, the product is aimed at consumers who want access to sports without a regular TV subscription.

Cord-cutting of pay TV services has put a squeeze on media companies as the once dependable revenue provided by subscribers declines while tech giants getting into the streaming business with pricey sports programming are driving up costs.

The announcement said the formation of the new service is “subject to the negotiation of definitive agreements among the parties.” It would also be available as an add-on to existing streaming services Hulu, Max and Disney+.

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The venture does not include channels owned by Comcast Corp. and Paramount Global, which both have NFL packages that include multiple Super Bowl telecasts and the PGA Tour. Comcast, owner of NBC and Peacock, is also a long-term rights holder of the Olympic Games. Paramount Global owns the broadcaster CBS. Representatives for both companies did not respond to requests for comment.

Bernstein & Co. media analyst Laurent Yoon wrote in a report late Tuesday that the deal raises several questions, including whether the joint venture will draw regulators’ scrutiny. Yoon and his colleagues said such key unknowns remain, including startup costs and the app’s potential to erode the more lucrative programming fees that the companies now receive from traditional pay-TV distributors.

“Will NBCU/Paramount join the bus? Why are they not in already?” Yoon and his colleagues wrote. “At this point, there are more questions than answers but this is definitely a step towards providing a compelling consumer choice to access sports outside the [pay-TV] offerings.”

The traditional media companies face increased competition from technology giants such as Amazon and Google’s YouTube TV. Amazon has rights to “Thursday Night Football,” and YouTube TV took over the once popular Sunday Ticket package of out-of-market NFL games from DirecTV. Amazon is also investing in Diamond Sports, which is currently in Chapter 11 bankruptcy proceedings in Texas.

Disney has previously said it was looking for a strategic partner for ESPN, and it has been in talks with the NFL about taking a stake.

Warner Bros. Discovery has been struggling to contain its mountain of debt and also hold on to its college and professional basketball rights as well as Major League Baseball.

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Fox currently has one of the strongest sports portfolios, which includes World Cup soccer and MLB’s post season and World Series, but it has been more restrained in its streaming ambitions, instead focusing energy on the free ad-supported service Tubi.

The move comes amid a sharp escalation in sports media rights fees, expected to become only more pronounced with the looming NBA contract renewal, which is expected to stretch the wallets of the legacy companies.

Disney and Warner Bros. Discovery are particularly concerned about Amazon’s interest in the NBA, the next major sports league media rights deal that is up for renewal after the 2024-25 season.

Amazon is expected to make an aggressive bid for a piece of the NBA package. Apple, which has the exclusive rights to Major League Soccer and a package of Friday night MLB games, is also expected to be more active in the live sports marketplace.

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