A huge new sports streaming service is scheduled to launch this fall with content from all the major sports, but what does it mean for viewers?
Three of the top television companies in American sports delivered a bombshell announcement Tuesday that said they were forming a joint “all-in-one” streaming service that will provide sports content from all the major pro sports leagues, plus college football, college basketball and more.
But what does that mean to the average sports viewer?
ESPN, Fox and Warner Bros. Discovery shared only some details of their agreement Tuesday. To gain a better understanding of it beyond that, USA TODAY Sports contacted sports business and legal experts about where this is headed, what it might cost and how it will affect viewing habits.
“It certainly is surprising,” said Neil Pilson, former president of CBS Sports. He also called it a potential watershed moment.
The companies otherwise are competitors with each other for viewers, advertising revenue and sports media rights, but in this case are joining to form a new streaming app scheduled to launch this fall, with each company owning one-third of it.
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What would it include?
The joint venture would be offered directly to consumers and will include ESPN+, plus access to 14 linear networks: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, Big Ten Network, TNT, TBS and truTV.
What you get on those channels would be available on this app. That includes the NFL, Major League Baseball, the NBA, WNBA, NHL, NCAA basketball tournament games and the PGA Tour. Commercials would be included, too.
“To me, this goes a long way in solving the sports dilemma that many viewers have,” former Fox Sports Networks president Bob Thompson told USA TODAY Sports. “They would like to cut the cord (to cable television), but if you are a sports fan, it is very, very difficult to do and get all of what you want. This goes a long way to remedying that situation.”
How much would streaming service cost viewers?
It’s to be determined. But Thompson predicted it could cost more than $40.
The math would have work for three companies that are paying huge fees to sports leagues for the rights to show this content. For example, ESPN, Fox, NBC, CBS and Amazon are scheduled to pay the NFL more than $100 billion combined through 2033 for rights to broadcast NFL games on their networks.
It would also have to take into account how the introduction of this streaming service will spur more viewers to ditch cable television – which has been a huge source of revenue for companies such as ESPN, the most expensive channel on cable television. Last year, ESPN took in more than $9 per subscriber from cable television, according to S&P Global Market Intelligence.
Why are they doing this?
Much of the media business in general has struggled to monetize online content as consumers have “cut the cord” from expensive traditional cable television bundles and instead turn to a wide and fractured array of streaming choices online. Disney, which owns ESPN, had been seeking a strategic partner for ESPN to help it navigate those choppy waters as its lucrative cable TV revenue decreases.
“They’re agreeing with the prediction that the cable audience is going to continue to shrink,” Pilson said.
By joining together online, they’re also not competing against each other for subscribers and instead are sharing them. This has the added benefit of creating a streaming service that has all of this content on one app instead of forcing viewers to subscribe to multiple services and toggle between them online.
So is this just another cable-TV-style bundle?
To a certain extent, yes. A subscriber will pay for a bundle of content from multiple channels. But it’s not like the traditional cable TV bundle in which subscribers were paying for dozens of channels they didn’t ask for and never watched. This is a skinnier bundle, only for sports.
Subscribers would also have the ability to bundle the product, including with streaming services Disney+, Hulu and/or Max, according to the announcement.
All of that could make it more attractive for viewers who pay big bills each month for cable TV.
“It could hasten the demise of the cable and satellite bundle now that there is a robust sports option in the streaming world,” Thompson said.
Is this even legal?
That’s up to the federal government to decide: Does it violate antitrust laws that prohibit monopolies and anti-competitive conduct? In this case, competitors are joining to sell their content together under one venture. Antitrust regulators would have to look at its structure and decide whether to intervene to protect American consumers and taxpayers.
Regulators tend to get nervous when competitors enter into deals like this, but “antitrust law has always had a soft spot for sports,” said Robin Feldman, professor at the University of California Law San Francisco.
Even if antitrust laws are implicated, regulatory agencies will likely try to factor in consumer interests in their decision. In this case, a new sports streaming platform could make life easier for the average sports fan.
“Consumers have been complaining about how difficult it is to watch various types of sports programs, or even figure out how to watch them,” Feldman told USA TODAY Sports. “I know my family will be thrilled.”
The announcement also noted that the formation of this new pay service is subject to the negotiation of definitive agreements amongst the parties.
Who is left out?
NBC Universal, CBS and their sports properties are not included, among others. So this new app won’t include everything a sports fan might want to see.
NBC is paying for rights to the Olympics through 2032 and NFL games on “Sunday Night Football” through 2033. CBS also has rights to NFL games through 2033 and this year will start broadcasting up to 15 Big Ten Conference football games. The new streaming app also likely would not include men’s basketball Final Four games on CBS, which alternates coverage of those games each year with TBS through 2032.
What about linear TV?
While revenue from cable or linear TV has been shrinking, it’s still a big part of the business for these companies. The NFL also likes being on linear television to maximize its viewership. That’s why Pilson questioned whether the NFL and other sports leagues might have concerns about a streaming service that could accelerate the abandonment of linear or broadcast TV in favor of streaming.
The NFL didn’t immediately return a message seeking comment, but NFL commissioner Roger Goodell said this week he didn’t envision a streaming-only Super Bowl happening during his tenure. “One of the secrets of our success is we are really committed to broadcast television,” he said.
On Tuesday, the three companies announced a deal that raises questions about their own commitment to linear TV.
“They’re placing their bet and business future on viewers who are going to take all of their programming from the streaming services,” Pilson said.
Contributing: Bailey Schulz, Gary Levin
Follow reporter Brent Schrotenboer @Schrotenboer. Email: bschrotenb@usatoday.com