- ESPN could launch full DTC service as early as 2025
- Broadcaster is eying content and tech partners
- Scripps has secured local TV deals with several major league teams
ESPN is reportedly interested in adding the National Football League (NFL) and National Basketball Association’s (NBA) streaming proposition, along with local games from Major League Baseball (MLB), to the planned expansion of its ESPN+ streaming service.
The Disney-owned sports broadcaster is set to launch a fully-fledged direct-to-consumer (DTC) service that combines both ESPN+ and the flagship ESPN network, which is currently only available on cable, as early as 2025.
Earlier this year it was reported to be in discussion with several US major sports leagues over a potential equity stake in exchange for additional content or more favourable rights agreements.
The Wall Street Journal (WSJ) suggests that NFL+, which offers live mobile streaming of in-market games as well as access to Redzone, as well as NBA League Pass, which provides streams of out-of-market matchups, could be part of any deal.
ESPN has also reportedly been in discussions with MLB about gaining the rights to local games involving teams caught up in the uncertainty surrounding several regional sports networks (RSN). Diamond Sports Group (DSG) is currently attempting to renegotiate contracts with its partners as it seeks to exit bankruptcy protection, while Warner Bros Discovery (WBD) is exiting the space.
ESPN+ is already home to the National Hockey League’s (NHL) out-of-market streaming platform and could add local games involving teams affected by the same challenges. Distribution via ESPN+ would provide additional reach and discoverability, but the broadcaster is unlikely to pay significant fees – instead the value of such an agreement would be in an equity stake and potential revenue sharing.
Amid the RSN turmoil, several major league teams who have reclaimed their rights from DSG or had them returned have opted for a combination of free-to-air (FTA) broadcasts and streaming as an alternative. Local television station operator Scripps has been a partner for several teams, including the NHL’s Arizona Coyotes, as part of a wider expansion into sport and is now eyeing up even more deals.
A report in Broadcast+Cable TV suggests that Scripps even has preliminary deals in place with several franchises should their rights deal with DSG be cancelled or if the Sinclair subsidiary fails to exit bankruptcy protection.
SportsPro says…
ESPN’s challenge is replicating a hugely successful business model in a streaming environment. The network has been one of the main beneficiaries of the bundle – and is arguably the glue still holding it together – but it knows the writing is on the wall and there is a need to adapt.
ESPN’s flagship network is currently available in 74 million homes in the US, down from 100 million ten years ago, while ESPN+ has 24.9 million subscribers. ESPN receives around US$10 a month for every cable customer that receives its channels – even if they don’t want it – while an ESPN+ subscription costs US$9.99 a month.
While strong brand awareness and an attractive rights portfolio mean it is better equipped than most to make this transition, ESPN will now have to actively attract and retain subscribers and make additional investments in technology and marketing. Compounding the challenge of this migration is the escalating cost of sports rights, driven by intense competition among streamers to fill out their platforms.
The addition of local rights would cement ESPN’s position as a hub for sports in a post-cable world. For major league teams looking to adapt to life after the RSN gravy train, ESPN’s platform would also help fill revenue gaps and provide access to millions of potential subscribers.
The irony of all this is that Disney actually acquired what became the Bally Sports RSNs as part of its takeover of 21st Century Fox but was forced to sell up by the US Department of Justice amid concerns that the transaction would hand one company too much power in the sports broadcasting industry.
Source link
credite