ESPN, Fox, Warner Bros to launch sports streaming platform; Citi 'incrementally' bullish

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ESPN, Fox, Warner Bros to launch sports streaming platform; Citi 'incrementally' bullish
Credit: © Reuters.

Disney's (DIS) ESPN, Fox (FOX), and Warner Bros. Discovery (NASDAQ: WBD ) announced on Tuesday their plans to roll out a joint sports streaming service in the fall, introducing a novel option for consumers to access premier live sports.

This service will be managed by a newly established company with a distinct leadership team. Disney, Fox, and Warner Bros. Discovery will each hold an equal one-third share in the venture.

The platform will allow consumers to subscribe through a dedicated app and offer options to bundle this new service with existing streaming platforms such as Disney+, Hulu, and Max. Aimed at sports enthusiasts, it will feature a more focused selection of linear networks than traditional cable packages, including sports content from the networks owned by Disney, Fox, and Warner Bros. Discovery, as well as ESPN+.

Although the service's name and pricing remain undisclosed, rumors suggest a starting range of around $45 to $50 monthly, with the potential for lower introductory rates to attract subscribers, based on insights from a source close to the project.

Despite promotional pricing offers, it's reportedly expected that the cost will exceed $30 monthly.

From a broader perspective, the goal is for this platform to become a central hub for sports programming, potentially expanding its catalog by incorporating channels like The Tennis Channel.

Ownership of the service is equally divided among Disney, Warner Bros. Discovery, and Fox, with revenue sharing from rights fees to be allocated based on the existing rates charged to pay TV providers by the cable networks.

“We are not surprised by today’s announcement, as we believe 2023 was the first year the financial incentives were in place to launch a sports tier,” Citi analysts wrote in a note.

“We view this development as incrementally positive for Disney, Fox, and Warner Brothers.”

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