ESPN, Fox, and Warner Bros. Discovery promise a groundbreaking sports app

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I won’t pretend to be much of a sportsball enthusiast—apart from when the Rugby World Cup comes around every four years: Go Bokke!—but it is interesting to observe streaming’s unstoppable conquest of viewers’ eyeballs. And on that front, Disney’s ESPN, Fox, and Warner Bros. Discovery (WBD) just announced what looks likely to be a milestone event.

Many if not most cable TV subscribers are only still in it for the sports, and now they may get less of a reason to hang on. As announced yesterday, the three media majors will pool their most popular sports programming into a new app (which as yet has neither a name nor pricing) that will launch in the fall, in time for NFL and college football, and that will be bundle-able with Disney+, Hulu, and Max. Expect games from the NFL, MLB, NBA, NHL, and many other sporty American TLAs, as well as more globally relevant fare such as the FIFA soccer World Cup, Grand Slam tennis, and so on.

Disney CEO Bob Iger called the move “a major win for sports fans, and an important step forward for the media business.” Fox CEO Lachlan Murdoch hailed “an array of amazing sports content all in one place,” and WBD CEO David Zaslav claimed the app’s announcement “exemplifies our ability as an industry to drive innovation and provide consumers with more choice, enjoyment, and value.”

Again, there’s no word on pricing yet, so the precise level of value is, er, TBD (these initialisms are contagious). It’s unlikely to be cheap—live sports rights are getting ever more expensive—but one anonymous executive told Bloomberg it would sit somewhere between stand-alone streaming offerings like ESPN+ ($11 a month) and the likes of YouTube TV ($73 a month), which may make sense for an awful lot of people.

Madison and Wall media analyst Brian Wieser, in a research note quoted by Bloomberg: “Combining as many sports rights into one platform as possible could help persuade sports fans to embrace such a service … This would also accelerate the pace of decline of traditional pay TV because there would be very little that would be unique to those traditional services.” Comcast’s and Charter’s shares are unsurprisingly down today.

Some of the financial details seem to have already been worked out. The Information reports that, although ESPN, Fox, and WBD will each own a third of the joint venture, each partner’s revenue share will be a function of their existing affiliate fees for cable TV operators; ESPN’s is the most expensive, so it will get more than Fox and WBD. But the three still need to negotiate definitive agreements before this app can become a reality.

Industry execs are reportedly calling this joint venture the “Hulu of sports” in reference to the nature of that streaming service’s let’s-all-hold-hands genesis. Of course, the Hulu consortium turned out to be full of intrigue, particularly when Disney’s 21st Century Fox purchase gave it a controlling stake and the company ended up launching a competing product, Disney+, that has now all but swallowed up now-Disney-owned Hulu. Per The Information, the new JV won’t stop Disney from launching a full ESPN streaming product in the coming years.

And then there’s the timing of this partnership among the three biggest sports media players in the U.S. “This joint venture is being undertaken during a time when the Department of Justice is itself almost obsessive about opposing mergers, particularly those whereby big companies become even more dominant,” said St. John’s University law professor Anthony Sabino in an emailed statement. “And remember, there is a proactive DOJ Antitrust Division (and an FTC, too) emboldened by a recent big win blocking the proposed JetBlue/Spirit Airlines merger. If the administration in Washington, D.C., worked so strenuously to block an airline merger, one can only anticipate those same agencies will be apoplectic over this.”

Looks like some drama will be bundled with the big game. More news below.

David Meyer

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