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In what may be the biggest rivalry between the Big Three since LeBron James and Chris Bosh joined Dwyane Wade in Miami, a trio of sports media giants — ESPN, Fox and Warner Bros. — are teaming up. Discovery – to launch a new broadcast. service.
Other than the identity of the directors, who will each own a third of the digital platform, almost nothing has been revealed about the joint venture. So far, the three parties have yet to provide further details on how much subscribers can expect to pay to access the new streaming service, or under what name it will be marketed.
The direct-to-consumer offering is expected to drop sometime this fall, presumably before the start of football season. From the little information made available Tuesday, the collaboration will effectively serve as a streaming “skinny bundle,” giving sports fans who don't subscribe to the legacy pay-TV package access to the ESPN family of networks and Disney's flagship broadcaster, ABC, as well as Fox and its cable siblings. Duplex (FS1 and FS2) and basic triple for WBD networks (TBS, TNT, truTV).
The digital package also includes three cable channels aligned with three of the major college sports conferences: Big Ten Network, SEC Network, and ACC Network). As part of today's announcement, the partners said the service will also be available to subscribers of existing streaming offerings like ESPN+, Hulu and Max.
The service will be overseen by an independent management team. More information about the collaboration will be made available on Wednesday during Fox's early morning earnings call, and Disney is expected to add to our collective store of knowledge during their own after-hours conference on Wednesday afternoon.
Given the obvious way the cable package has managed to keep the tradition of most sports-hungry consumers alive, the new venture is not expected to cannibalize an already much diminished pay-TV model. In the past five years, about 35 million TV households in the United States, or about 40% of all satellite TV subscribers, have cut the cord, although the majority of these defectors appear to be light or infrequent sports viewers. Despite an 18% decline in overall TV usage since 2022, sports ratings have increased over the same period, which, if nothing else, seems to indicate that sports may be the only thing keeping the package together.
Moreover, the continued erosion in prime-time streaming deliveries suggests that most Americans are turning away from pay TV in order to enjoy entertainment-heavy offerings on Netflix, Disney+ and other streaming services. According to Nielsen, the average network TV show attracts just 3.06 million viewers per episode, of which only 497,841 people are members of the adult demo between the ages of 18 and 49. By comparison, the NFL's Sunday afternoon national average of 25.3 million viewers this season on CBS/Fox, a third of whom (8.29 million) were adults under 50. In terms of consumers most sought after by NFL advertisers, the Sunday big window beats the main broadcast by a multiple of 16.7.
“The launch of this new streaming sports service is an important moment for Disney and ESPN, a huge win for sports fans, and an important step forward for the media industry,” Disney CEO Bob Iger said in a press release. “This means that the full lineup of ESPN channels will be available to consumers alongside sports programming from other industry leaders as part of a premium sports-focused service.”
Among the professional sports leagues that will be available through the new service are the NFL, NBA, MLB, and NHL. At the collegiate level, fans will be able to stream the College Football Playoff, the NCAA men's and women's basketball tournaments, as well as a host of regular season contests across the SEC, ACC, Big Ten, Big 12 and Big East.
In the same release, Fox CEO Lachlan Murdoch said his team was “excited to bring the Fox Sports portfolio to this exciting new platform.” Murdoch is expected to give investors some additional thoughts on the proposal during his earnings presentation tomorrow morning.
The three parties have not yet officially signed the partnership, although an agreement has been reached in principle. In keeping with the dual revenue stream model that made cable a powerhouse in the 1980s and 1990s, the subscription service will be ad-supported.
Joining this collaborative effort are NBC and CBS, both of which offer a wide range of televised sports content via their own streaming services (Peacock and Paramount+.) NBC is owned by cable giant Comcast, and thus is particularly wary of getting involved in a venture that could accelerate the package's decline Old.
According to its latest earnings report, Comcast lost 389,000 video subscribers in the fourth quarter of 2023, ending the year with 14.1 million subscribers. That's down from 16.1 million in the fourth quarter of 2022. At the end of 2019, Comcast had 21.3 domestic video customers.
