Disney had quite an eventful Q1 earnings call earlier this week. CEO Bob Iger announced a $1.5 billion investment in Fortnite developer Epic Games, a surprise follow up to box office hit Moana, and an exclusive home for Taylor Swift: The Eras Tour on Disney+. But what can be taken from the announcement of a joint ESPN, Warner Bros. Discovery, and Fox Sports streaming service set to debut this year? Kim Masters and Matt Belloni dive in.
Hulu for sports?
Similar to Hulu’s joint venture formation, the currently untitled sports streamer is equally shared between ESPN, Warner Bros. Discovery, and Fox. “This is an app that's going to be owned one third, one third, one third by these three big players. They are going to put all of their sports assets into this service. It will have about 50% of the available sports in this country, probably about 70% or 80% of the sports that people care about,” Belloni says.
Another streamer?
While this new streaming service provides a convenient access point for sports fans, there won’t be any exclusivity as of now. “These are all going to be available wherever they were available before. So if you were watching something on one of the Warner Brothers discovery cable channels, you can still do that. But this is a way to have it all and not have to have the cable subscription, for example,” Masters clarifies.
What’s the catch? With challenging local and regional distribution deals set in place, a large number of regular season games may be limited due to blackouts. “The problem is, it doesn't cover–potentially, we don't know yet–the regional sports networks and the local sports, they have to adhere to all the blackouts,” Belloni explains. “So, if you watch the NBA national game and it happens to be the Lakers, they will not show it because the Lakers have their local games on local channels.”
Doomsday for cable bundles? Despite positive words from News Corp chairman Lachlan Murdoch during a recent earnings call, the risk of fall-off from cable subscribers is possible. “There is a chance here, and I think it's a material chance, that this is only going to exacerbate the downfall of the cable bundle. And it's going to cause these companies to lose even more of the profits that they throw off. And potentially it'll be made up by the streaming service; potentially not,” Belloni speculates.
