Fox Corp, Walt Disney's ESPN and Warner Bros Discovery said on Tuesday they will come together to launch a sports streaming service later this autumn, in a bid to capture younger fans who are not tuned in to television.
The media companies will form a joint venture to create a new service from their broad portfolio of professional and collegiate sports rights, which span the National Football League, the National Basketball League, Major League Baseball, FIFA World Cup and college competitions.
The yet-to-be-named service would offer an all-in-one package of programming that would include television channels, such as ESPN, TNT and FS1, as well as sports content that is streamed. Subscribers would have the option of purchasing it as part of a streaming bundle from Disney+, Hulu or Max.
"This means the full suite of ESPN channels will be available to consumers alongside the sports programming of other leaders," Disney CEO Bob Iger said in a statement.
This sports-centric service is designed to provide consumers with more choice, not replace Disney's flagship ESPN television network or Fox's FS1, according to sources familiar with the matter.
The CEOs have been discussing a collaboration for some time, according to two people with knowledge of the situation.
"We believe the service will provide passionate fans outside of the traditional bundle an array of amazing sports content all in one place," said Fox Chief Executive Lachlan Murdoch.
The new entity will be jointly owned by the three media companies, which will have equal board representation and agree to license their sports content on a non-exclusive basis. An independent management team will operate the new entity.
The sports-centric service signals a recognition that there is a large market for sports outside of traditional TV. This platform is designed to capitalize on that opportunity. It also provides another way for these media companies to monetize increasingly costly sports rights.
"This new sports service exemplifies our ability as an industry to drive innovation and provide consumers with more choice, enjoyment and value," Warner Bros Discovery CEO David Zaslav said in a statement.
Early last year, Iger had suggested that Walt Disney wants to keep ESPN and will look for strategic partners and investors, as he sought to take the network online.
Activist investor Nelson Peltz believes Disney can achieve profitability in streaming by bundling its ESPN+ online service with a larger player interested in sports, according to media reports from last month.
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