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The sports bundle is back.
In a stunning move, Disney, Fox and Warner Bros. Discovery have teamed up to launch a new joint streaming TV service that combines sports rights.
The joint venture brings together portfolios of sports from linear networks like ESPN’s suite of linear properties, ABC and ESPN+; Fox and its properties FS1 and FS2; and WBD’s cablers such as TBS, TNT and truTV, as well as certain direct-to-consumer offerings.
Why the historic team-up is happening
With media rights to major sports leagues becoming more and more expensive, companies see the benefit in investing in streaming rights, especially as live sports drive both higher premiums and higher engagement.
“Live sports are great for attracting a large audience and for engaging that audience with both the competition, but also the ad breaks,” Kevin Krim, CEO of TV advertising data firm EDO, told Adweek. “The broadcasters are using this engagement data and showing how high the engagement can be to set premium prices that are well above everything else you can charge, on both traditional TV and streaming. That’s the economic engine that drives both the whole TV ecosystem, but it’s also what’s driving up the cost of these rights deals with the leagues.”
Set to launch in the fall of 2024 ahead of the NFL season, the new service will be available as a DTC product as a new app. It will also be made accessible to subscribers of Max, Hulu and ESPN+. Pricing will be announced at a later date.
A game plan for rising costs
The NBA rights deal expires at the end of the 2025 season, becoming the next major league to negotiate a new rights agreement. And with streamers like Apple, Netflix and Amazon swirling, media companies see the benefit of joining forces against tech giants.
“If you’re in the shoes of Disney, Warner Bros. Discovery, Fox, and you’re looking at a competitive environment where you’re going to be bidding for one of the crown jewels of television—the NBA—you’re gonna be bidding against Amazon, Apple, Google and Netflix,” said Krim. “You realize you need to team up, and I think that’s what this is pretty clearly a response to.”
Krim also noted that streaming services have seen major success with live sports, with Thursday Night Football on Prime Video seeing a 70% increase in brand engagement on ads, higher than rates on cable, broadcast and the NFL overall. NBCUniversal and Peacock also had “a really good experience” with the exclusive NFL playoff game on Peacock, according to Krim.
