ESPN goals to be the hub for all reside sports activities protection
Disney‘s ESPN wants to be the hub for all live sports – even its competition.
The sports network has been in talks with major sports leagues and media partners about launching a feature on ESPN.com and its free ESPN app that takes users directly to where a live sporting event is being streamed, according to people familiar with the matter.
This could include national or global streaming services, such as Apple TV+ and Amazon Prime Video, or a regional sports service such as Sinclairs Bally Sports+ or Madison Square Garden Entertainment MSG+.
Actual media partners have not yet been determined and there is no timeline as to when such a feature would launch, said the people, who asked not to be named because discussions are private. Still, ESPN pitched the idea to major sports leagues and media outlets to gauge their enthusiasm, people said.
While the terms and conditions of the concept could change, ESPN was considering a model where it would take a subscription revenue cut from a user who signed up for a streaming service through the ESPN app or website, they said two of the people. If a customer already subscribes to a particular service, ESPN would not collect any money and would only provide the link as a courtesy, people familiar with the matter said.
ESPN could also alert users to games airing on linear television and solidify its new role as the TV guide for live sports, people said.
An ESPN spokesman declined to comment.
Several regional sports network owners have expressed particular optimism about the idea as they seek to boost subscription revenue as 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 considering a bankruptcy restructuring after missing out on a $140 million debt repayment. According to The Wall Street Journal, Warner Bros. Discovery has warned the leagues that it plans to exit the RSN business entirely.
It’s becoming increasingly difficult for consumers to figure out how to find a particular game as sports leagues have split rights packages to maximize transmission fees between streaming partners. A New York Yankees game for a New York area fan might be on linear television on YES Network, ESPN or Warner Bros. Discovery‘s TBS, or it could be streamed on Amazon Prime Video, Apple TV+ or NBCUniversal’s Peacock.
ESPN aims to use its self-proclaimed status as the “world leader in esports” to become the de facto first port of call for any consumer looking for live sports coverage, people said. Currently, ESPN only links users to ESPN-licensed content. That equates to almost 30% of all televised or streamed US sports, according to people familiar with the matter.
ESPN Chairman Jimmy Pitaro
Steve Zak Photography | MovieMagic | Getty Images
ESPN’s willingness to promote other streaming services points to a strategic shift in the streaming wars. Disney is less focused on winning streaming subscribers — and eyeballs — at all costs. Company executives have stressed that they want investors to prioritize revenue and profit rather than subscriber growth, a trend pioneered by other media companies including Netflix and Warner Bros. Discovery.
Media companies have also started to act in lockstep as streaming growth has slowed. This limits the competitive pressure and promotes cooperation. Disney and Warner Bros. Discovery also emphasize licensing content to competing streaming services to boost sales, rather than keeping the content exclusive.
Disney CEO Bob Iger last month announced a company-wide reorganization that made ESPN a separate division headed by ESPN Chairman Jimmy Pitaro. The move could put ESPN’s finances under closer scrutiny during earnings calls. Pitaro announced on Wednesday that he will streamline management under him to reduce the number of his direct reports.
While activist investor Dan Loeb pushed last year for Disney to spin off or sell ESPN, Iger said there are no plans to do so.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
WATCH: Bob Iger’s first 100 days after returning as Disney CEO