ESPN, Fox and Warner Bros. Discovery to form sports streaming service venture

Three major U.S. sports TV companies—ESPN, Fox, and Warner Bros. Discovery—have jointly announced the creation of a streaming venture to consolidate all their linear sports TV content. The move is significant as it aims to attract sports enthusiasts who are increasingly opting out of expensive cable bundles.

Key points:

1. Each company will have an equal one-third ownership stake in the venture and will collaboratively select a management team, establish branding, and determine pricing.
2. The new streaming service is slated to launch later this year and will be accessible through a dedicated app developed by a separate team independent of the management of the three companies.
3. The standalone subscription streaming service will offer an unprecedented array of live sports content from sports networks affiliated with ESPN, Fox, and Warner Bros. Discovery.
4. The primary revenue model will be consumer subscription fees, while each network will retain the ability to sell ads on its networks.
5. The joint venture will involve equal board representation from each of the three companies, and they will license their sports content to the venture on a non-exclusive basis.
6. The service will include content from linear TV networks such as ESPN, ABC, TNT, and Fox, as well as live sports content from ESPN+.
7. All three companies own rights to major professional sports league events, encompassing the NFL, MLB, NHL, NBA, major college sports divisions, and more.

Additional details:

1. The joint venture, initially reported by the Wall Street Journal, has received preliminary agreement from all three companies, pending final negotiations and discussions with distributors.
2. The service’s formation is subject to negotiations with distributors, and early discussions with rights holders are underway.
3. The move reflects the changing landscape of TV consumption, with live sports being a crucial factor in retaining cable bundles, even as more viewers migrate to streaming platforms.

Looking ahead:

1. While the new joint venture is a collaborative effort, ESPN is also planning to launch its direct-to-consumer service in 2025, a separate initiative confirmed by CEO Bob Iger last year.
2. ESPN is currently engaged in discussions with major sports leagues and streaming platforms for potential strategic partnerships.