With ESPN's direct-to-consumer plan, the network is trying to live up to its mission statement of “Serving Sports Fans.” anytime. anywhere. “
In the process, Disney CEO Bob Iger and ESPN Chairman Jimmy Pitaro are exploring a deal. anytime. anywhere.
Iger and Pitaro are looking to add to ESPN's already impressive lineup of content through investment negotiations with the biggest leagues and distribution talks with the biggest digital players, at a price point that will allow it to serve all sports fans. .
It all may sound simple, but they have some complexities surrounding the full ESPN direct-to-consumer subscription product launching this fall in conjunction with Fox and Warner Bros. Discovery, followed by ESPN's standalone service planned for 2025. negotiations are underway.
No company is more important to cable bundles, which cost more than $10 per subscriber, and no company benefits more than ESPN. ESPN will still be available on cable, but Disney and ESPN are looking to further stack their sports content and distribution decks to their advantage.
ESPN's cable home count peaked at 100 million in 2011 and now stands at about 71 million, according to Nielsen. One of Iger and Pitaro's most important goals is to reverse subscriber trends with direct-to-consumer plans.
ESPN's goal is to sell one or two minority stakes in the company, with the NFL and NBA among the top candidates.
ESPN continues to negotiate with the NFL for the league to become an equity partner, executives briefed on the conversations said. The Athletic. Evaluating what the league will offer in return, and how much ESPN is worth in the billions, is one focus of ongoing negotiations.
If the deal with the NFL goes through, ESPN would take control of NFL media, including NFL Network, NFL+, Red Zone and NFL Movies. ESPN continues to have a wealth of programming, and the NFL Network continues to have programming 24/7.
The amount of NFL content will be a further selling point for ESPN's DTC product, which will deliver even more NFL games on top of the 25 games ESPN already has per season.
ESPN hosted a record 25 NFL games during the regular season and playoffs in 2023, and that number is likely to rise if the network reaches a capital deal with the NFL. (Kirby Lee/USA Today)
ESPN is considering a partnership with Google/YouTube, although the digital world has diminished that advantage, according to executives briefed on the company's thinking. ESPN and YouTube have been working on a partnership for some time, and the network is already available on the company's light cable service, YouTube TV.
ESPN is also in talks with Roku to offer a new DTC service as one of the tiles when viewers turn on their TVs, and other digital powers such as Amazon and Apple are in talks with ESPN, according to executives familiar with the discussions. It is said that they are also in talks.
ESPN has been planning for years to launch a direct-to-consumer service by 2025. The company already has a direct-to-consumer service, ESPN+, which primarily offers additional programming and not top games, but features popular sports such as UFC and UFC. various soccer tournaments.
ESPN has focused its internal DTC plans on services that are much cheaper than the $100-plus monthly cable bill.
Disney/ESPN recently announced a partnership with Fox and Warner Bros. Discovery to offer a “skinny bundle” of direct-to-consumer sports programming in the fall. The plan is to cost between $40 and $50 per month, according to network executives briefed on the plan.
Meanwhile, ESPN plans to bring a standalone direct-to-consumer product to market in 2025 for $25 to $30 a month, according to executives briefed on the discussions.
With these packages and packages like YouTube TV, which includes ABC/ESPN, Fox, and TNT Sports, plus other services like NBC and CBS, for $70 or more per month, ESPN is giving fans more choice. It is said that
Meanwhile, the NBA is first focused on a network rights deal that will hit the open market in late April. Like the NFL, top NBA executives are also interested in ESPN, according to people familiar with their thinking.
ESPN is currently negotiating with the NBA to renew its rights package to include the NBA Finals. ESPN pays about $2.7 billion a year and plans to increase that amount, but the two companies still differ on financial matters. ABC/ESPN is a favorite to continue with the NBA, even if a deal may not be reached by April 22nd, when the NBA can formally hold talks with other organizations besides ESPN and incumbent TNT Sports, owned by Warner Bros. Discovery. He is a strong candidate.
The NBA plans to add at least one more partner, and possibly two, according to people briefed on the plans. The streamer is expected to pick up one of his new deals.
Amazon Prime Video and NBC Sports are known as leading candidates. Google/YouTubeTV, Netflix and Apple have discussed the package, according to executives briefed on the matter.
If ESPN is unable to partner with the NFL or NBA, the MLB and NHL will be considered next capital partners. Iger also said ESPN could enter the market without a partner.
Meanwhile, ESPN wants to be the solution for MLB, NBA, and NHL in regional sports and wants to offer it as an add-on channel for an additional fee as part of its direct-to-consumer strategy so fans can watch their favorite teams. There is. . Many regional sports networks are struggling due to the decline in cable bundles.
The current model guarantees franchises millions of dollars in upfront fees. ESPN is more likely to share the benefits and risks of regional sports and has no intention of paying big checks to speculation, according to people briefed on the discussions.
After the 2025 MLB season, ESPN is on the verge of gaining the right to opt out of a $550 million annual contract that includes “Sunday Night Baseball” and the Home Run Derby. ESPN will consider opting out of the contract or at least renegotiating it, according to executives briefed on the plan.
There's a good chance he'll stay in baseball, but at a lower price. Currently, the batting order has fallen to Iger and Pitarou.
These are now open for business and are expected to be very active over the next few months leading up to the direct-to-consumer launch.
even deeper
ESPN, Fox and Warner Bros.' new streaming ventures aren't the answer, at least not yet.
(Top photo of ESPN's “Monday Night Countdown” set before a December game in Jacksonville, Fla.: Mike Carlson/Getty Images)
