BOOM! ESPN(Disney), Fox and Warner Bros. Join Forces for NEW Sports Streaming Service

I woke up last night because kids in my family still crawl into our bed even at 8 and 6 - that's for another post - just to read a post from Dan Rayburn - who I just spoke to few hours before - that the big US media decided to go the DAZN route by putting all their eggs in one basket. As we were observing all streaming wars giants trying to use sport as a differentiator these CEOs decided to make an 90 degrees turn move and revolutionize the market.

NBCU Peacock will be the only media group out of the deal not considering Amazon and Apple. CBS/Paramount not included? And not all sports rights of the 3 giants will be added to the bundle it seems.

I can imagine the strategy rooms of all media groups (in or out) quite busy these hours.

The internal name seems to be "raptor" I can see why.

I am super excited because this has the potential to redefine sport discovery and consumption if done well.

My dream is to be the next CPO of this new venture.

What the bzurg just happened?

Yesterday, Disney, Fox, and Warner Bros. Discovery made a landmark announcement - they are partnering to launch a new direct-to-consumer streaming service focused on live sports and sports-related entertainment. The service, slated to debut in Fall 2024, aims to capture sports fans increasingly cutting the cord and moving to streaming platforms.

Dubbed "the sports streaming wars" by some media analysts, this new joint venture ratchets up the competition with other tech giants investing heavily in sports streaming rights. Just last year, Apple signed a 10-year deal with MLS, Amazon nabbed exclusive TNF rights, and Netflix is rumored to be exploring live sports.

So what will this new platform include? 14 linear TV channels across the three media conglomerates, including sports juggernauts ESPN, FS1, TNT, and local ABC/Fox broadcast stations. This means games and matches from nearly every major sports league - NFL, NBA, MLB, NHL, PGA Tour, Grand Slam tennis, soccer leagues, UFC, and more. Also bundled in is ESPN+, Warner's HBO Max, and other streaming services already offered by the companies.

The aim is to aggregate as much live sports content as possible to entice cord-cutters that still want to easily access games. Offering on-demand shows and movies to supplement the live sports is a bonus, making this an attractive one-stop shop.

Many details are still unknown - the name, price point, leadership team. But make no mistake, this partnership marks a strategic shift to go all-in on streaming for the media giants as linear TV declines. No longer competing as rivals in streaming, they are now allies with shared infrastructure, costs, and rewards.

Of course, some live sports remain locked up by other media companies like NBC and Amazon. But for the extensive portfolio of rights under the "Big 3" of Disney, Fox, Warner - this joint streaming venture could be a game changer in the ongoing sports media revolution.

Questions

There are so many questions on this deal - here is a list by Dan Rayburn :

Original post here

Questions from Dan with my addition in (bold).

• Cost of service and bundling options with Disney and WBD's other DTC services (Carlo:Will they start low and ramp up prices or start tough? Will here be an AVOD option? TVOD?)
• WBD has no NFL games. Does their inclusion indicate they may have renewed their deal with the NBA? (I'm speculating) (Carlo:Good guess)
• We know the NFL is the number one viewed sport in the US, but this won't have Sunday Night Football, which is on NBC and Peacock, Sunday games on CBS and Paramount, and Thursday Night Football, which is on Amazon. (Carlo: NFL rights are basically avoiding this to be a monopoly)
• Paramount Global has rights to the NFL, NCAA Men’s Basketball, the PGA Tour and soccer’s Champions League. Many sports are missing from this new JV, and one has to wonder why Paramount is not included. (Carlo: will it be at a later stage, but yes why not now?)
• Who's tech stack will this be built on? Max is very busy with their service and doing many enhancements, and Disney is already laying the groundwork for their DTC ESPN app. I don't see Disney being able to take on the engineering work; Max might also be too busy. (Carlo: This was my first techie-brain question, imagine CTOs starting a fight to own this, and again see below for who should be the next CPO. I am super excited because this has the potential to redefine sport discovery and consumption if done well.)
• What type of ad formats will be offered? Inserting ads into a live stream is not easy at scale; doing it on a personalized level is challenging, as we saw with the NFL Wild Card game on Peacock, where DAI was not used and the ads were burned in. (Carlo: also here there is a lot the different companies can bring, but that also depends on who is doing the broadcast production in some way for in-video ads)
• How will user data and usage be shared amongst all three companies? (Carlo: They should belong to the JV and I would imagine they will be shared by all members but what about user privacy then? Complex terms and conditions)
• There are no regional sports networks in the bundle. Will the newly formed JV try to bring that content to the platform? (Carlo: that could be year 2 objective)
• All three companies own an equal share in the new JV, but I'm told revenue will not be split the same way. What is the methodology that determines the revenue split? (Carlo: good point! I am sure they discussed at length, will it be based on performance of viewership or upfront?)
• Are there enough sports during the year to keep churn low? Many sports fans like myself only watch one sport. Churn could be high as users come on/off the platform for just one sports league each season. And also, do any of these companies in the JV truly understand what the sports viewership crossover is from one sport to another? Or are they guessing a "sports fan" wants to watch all sports? (I edited two questions together)(Carlo: funny we discussed the seasonality of churn in sports few hours ago! But yes, for single sport viewers this is just another service, for multiple sports viewers it's a potential game changer but will be those enough to make it sustainable? Maybe for families it where there maybe a variety of sports for different people that could be an advantage)
• Will Max strip out the sports option from their D2C service once this new sports service launches? I assume not, but I wonder since they recently postponed charging users for the B/R (Bleacher Report) Sports Add-on. And also, this does not change that Disney is still looking for a strategic partner for ESPN and plans to offer a stand-alone ESPN streaming app. Does this news change the type of strategic partner or investor they want? (Carlo: I have edited these two questions together as they are part of the same matter, what happens to existing projects and plans for the 3 new friends)
• Will independent networks be added over time? (Carlo: fascinating to see what more could be added through times if this works well)
• Carlo: What about this being a monopoly? Can the anti-trust block this? Can NBC Peacock make some moves there?

US Sport Rights Matrix

Not as complete as Thierry Fautier matrix (below) but I just did a sport matrix rights from a Sportico article few days ago... (it's the main image of this article)

Was that a premonition or did Sportico new something about it?

Thierry's matrix

Original media release

ESPN, Fox and Warner Bros. Discovery Forming Joint Venture to Launch Streaming Sports Service in the U.S.

ESPN, a subsidiary of The Walt Disney Company, FOX and Warner Bros. Discovery have reached an understanding on principal terms to form a new Joint Venture (JV) to build an innovative new platform to house a compelling streaming sports service. The platform brings together the companies’ portfolios of sports networks, certain direct-to-consumer (DTC) sports services and sports rights – including content from all the major professional sports leagues and college sports. The formation of the pay service is subject to the negotiation of definitive agreements amongst the parties. The offering, scheduled to launch in the fall of 2024, would be made available directly to consumers via a new app. Subscribers would also have the ability to bundle the product, including with Disney+, Hulu and/or Max.

The platform would aggregate content to offer fans an extensive, dynamic lineup of sports content, aiming to provide a new and differentiated experience to serve sports fans, particularly those outside of the traditional pay TV bundle.

By subscribing to this focused, all-in-one premier sports service, fans would have access to the linear sports networks including ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS, truTV, as well as ESPN+.

Key Highlights:

• ESPN, FOX and Warner Bros. Discovery would form a new joint venture to develop, launch and operate a streaming sports bundle of linear networks and certain DTC sports content and services.
• Each entity would own one-third of the JV, have equal board representation and license their sports content to the joint venture on a non-exclusive basis.
• The service would have a new brand with an independent management team.

Bob Iger, Chief Executive Officer of The Walt Disney Company said, “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. 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. I’m grateful to Jimmy Pitaro and the team at ESPN, who are at the forefront of innovating on behalf of consumers to create new offerings with more choice and greater value.”

Lachlan Murdoch, Executive Chair and Chief Executive Officer of FOX said, “We’re pumped to bring the FOX Sports portfolio to this new and exciting platform.?We believe the service will provide passionate fans outside of the traditional bundle an array of amazing sports content all in one place.”

David Zaslav, Chief Executive Officer of Warner Bros. Discovery, said “At WBD, our ambition is always to connect our leading content and brands with as many viewers as possible, and this exciting joint venture and the unparalleled combination of marquee sports rights and access to the greatest sporting events in the world allows us to do just that. This new sports 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 details, including pricing, will be announced at a later date.

The new service will showcase thousands of high-profile sporting events includi

g:

Here is my CV I want to be the next CPO of this venture

Download the CV

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