ESPN wants to be the hub of all live sports streaming — even if it helps its competition
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Disney‘s ESPN wants to be the hub for all live sports streaming — even for its competition.
The sports network has held conversations with major sports leagues and media partners about launching a feature on ESPN.com and its free ESPN app that will link users directly to where a live sporting event is streaming, according to people familiar with the matter.
That could include national or global streaming services, such as Apple TV+ and Amazon Prime Video, or a regional sports service such as Sinclair’s Bally Sports+ or Madison Square Garden Entertainment’s MSG+.
The actual media partners haven’t yet been determined, and there’s no timeline on when such a feature would launch, said the people, who asked not to be named because the discussions are private. Still, ESPN has broached the idea to the major sports leagues and media companies to gauge their enthusiasm, the people said.
While the business terms of the concept could still change, ESPN has considered a model in which it would take a cut of subscription revenue from a user who signed up for a streaming service through the ESPN app or website, two of the people said. If a customer already subscribes to a given service, ESPN would collect no money and just provide the link as a courtesy, people familiar with the matter said.
ESPN may also alert users to games that air on linear TV, cementing its new role as the TV guide of live sports, the people said.
An ESPN spokesman declined to comment.
Several owners of regional sports networks have expressed particular optimism about the idea as they try to boost subscription revenue while leagues question the larger industry’s business prospects in a streaming-dominated ecosystem, two of the people said. CNBC previously reported that Sinclair’s Diamond Sports Group is contemplating bankruptcy restructuring after missing a $140 million debt repayment. Warner Bros. Discovery has alerted leagues it plans to exit the RSN business altogether, according to The Wall Street Journal.
It’s become increasingly difficult for consumers to sort out how to find a given game as rights packages have been carved up by sports leagues looking to maximize carriage fees among streaming partners. A New York Yankees game for a New York-area fan could air on linear TV on the YES Network, ESPN or Warner Bros. Discovery‘s TBS, or it could stream on Amazon Prime Video, Apple TV+ or NBCUniversal’s Peacock.
ESPN wants to use its self-proclaimed status as “the worldwide leader in sports” to become the de facto first stop for all consumers looking where to watch live sports, the people said. Currently, ESPN only links users to ESPN-licensed content. That amounts to almost 30% of all televised or streamed U.S. sports, according to people familiar with the matter.
ESPN Chairman Jimmy Pitaro
Steve Zak Photography | FilmMagic | Getty Images
ESPN’s willingness to promote other streaming services suggests a strategic shift in the streaming wars. Disney is less focused on gaining streaming subscribers — and eyeballs — at all costs. Company executives have emphasized they want investors to prioritize revenue and profit rather than subscriber growth, a trend started by other media companies, including Netflix and Warner Bros. Discovery.
Media companies have also begun trading in lockstep as streaming growth has slowed. That’s limited competitive pressures and promoted working together. Disney and Warner Bros. Discovery are also emphasizing licensing content to rival streaming services to increase revenue rather than keep the content exclusive.
Disney CEO Bob Iger announced a company-wide reorganization last month that made ESPN a standalone division, run by ESPN Chairman Jimmy Pitaro. The move may bring ESPN’s finances under closer scrutiny during earnings calls. Pitaro announced Wednesday he’s streamlining management underneath him to reduce his number of direct reports.
While activist investor Dan Loeb last year pushed for Disney to spin out or sell ESPN, Iger said there are no plans for that.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
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