March 2, 2024

Warner Bros.

ESPN, Fox, and Warner Bros. Discovery have revealed plans to release a sports streaming platform later this year.

The streaming platform will feature content from at least 15 networks and four leading professional sports leagues. The streaming platform will be a single place where people can view a majority of sports content.

Joint Sports Streaming Service

This sports streaming platform will be owned by a newly formed company and have its leadership team. Disney, Fox, and Warner Bros. Discovery will each own a one-third stake in the company.

Consumers will make a direct subscription using the new app. Moreover, subscribers will also have a chance to bundle the product alongside streaming platforms like Disney+, Hulu, and Max. Doing this will reduce subscription costs and attract more users.

This streaming platform is tailored towards sports fans. The platform will feature all the sports content offered by the broadcast and cable networks owned by Disney, Fox, Warner Bros. Discovery, and ESPN+.

The entertainment giants have not set a price for the new streaming platform. However, a report by CNBC claimed that the introductory price could range between $45 and $50 to entice new customers.

The three companies anticipate that the long-term objective of this platform is to have a major sports hub. The companies might also choose to integrate independent networks like the Tennis Channel, which will improve the available offerings.

The rights fee revenue earned by the two companies will be proportional to what the cable networks charge the pay-TV providers.

The CEO of Disney, Bob Iger, opined that the launch of the new streaming sports service was a major moment for the company and a win for sports fans. The partnership also marked a notable achievement in the sports industry.

Iger added,

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.

ESPN to Continue Its Planned Offerings

The release of this new product will not prevent ESPN from providing the full direct-to-consumer streaming product. ESPN has been looking for strategic partners amid plans to launch this service. Disney is currently in the process of researching the available offerings and it plans to launch by next year.

The announcement of this sports streaming platform comes as ESPN and Warner Bros. Discovery plan to enter into a negotiation to renew their rights to the NBA. The rights to this program will expire at the end of the next season.

Analysts have likened the partnership between the three companies to what happened after Hulu launched in 2008.

Kevin Krim, the CEO of ad measurement firm EDO, said the partnership was being driven by the NBA. According to the expert, the NBA was the second-best franchise on television after the NFL. Therefore, new renegotiation deals were bound to enter the market.

ESPN and Netflix Deal Will Likely Not Happen

The partnership between Fox, Disney, and Warner comes after activist investor Nelson Peltz proposed the introduction of an ESPN+ and Netflix streaming bundle.

Peltz, through Trian Fund Management, is among the largest shareholders at Disney with nearly $3 billion worth of stock.

The proposed deal comes as Disney seeks to gain its footing in the streaming industry that is currently witnessing increased competition. Disney has been losing to giants such as Netflix, with Disney losing $387 million in the most recent quarter.

On the other hand, Netflix is investing heavily in the sports industry. The streaming platform struck a major deal with WWE Raw to start airing live wrestling matches from 2025. Netflix also solidified its position as the leading streaming platform in its recent quarterly earnings.


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