A new sports streaming joint venture involving The Walt Disney Company (NYSE:DIS), Warner Bros. Discovery (NASDAQ:WBD) and Fox Corporation (NASDAQ:FOX)(NASDAQ:FOXA) is expected to offer more than just an “extensive, dynamic lineup of sports content,” Needham analyst Laura Martin says.
What Happened: Disney will own “1/3 of the new JV and continue to own 100% of its sports rights,” Martin said.
But by licensing its rights non-exclusively to the new JV, Martin expects the media conglomerate “to collect revs lost when linear TV subs cut the cord.”
Disney, like other traditional media companies, has suffered in recent years due to customers ditching traditional cable in favor of streaming. And the company’s own attempts to offer streaming content have yet to turn a profit.
The Bob Iger-led company reportedly lost more than $1.6 billion from its streaming businesses in the first nine months of 2023, despite gaining 8 million subscribers.
Teaming up with Warner and Fox to offer a new streaming bundle that includes Disney’s ESPN sports content is seen as an effort to change the trajectory.
The platform — currently without a name — will include channels like ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS and truTV.
The new platform will also include ESPN+ and come with an option to bundle Disney+, Hulu and Max.
Why It Matters: Martin, who has a Hold rating and no price target on Disney, points out how the three media companies control around 85% of U.S. sports rights based on estimates.
Together, they could form the largest “sports-centric streaming service” in the U.S.
“This JV represents a new distribution partner for DIS, without an intermediary rev share. Also, ESPN commands the highest fees from the smallest distributors, and this new JV will start with zero subs.”
The joint venture is dependent on the signing of definitive agreements from the three entities. Should they sign, the platform is expected to launch in the fall of 2024.
“The launch of this new streaming sports service is a significant moment for Disney and ESPN, a major win for sports fans, and an important step forward for the media business,” Iger said.
Related Link: Disney Q1 Earnings Preview: Media Company Battles DeSantis, Musk, Peltz
What’s Next: News of the partnership comes…
Click Here to Read the Full Original Article at Cryptocurrencies Feed…
