ESPN Aims to Add Local Rights as ‘Flagship’ Streamer Prepares for 2025 Launch
ESPN Aims to Add Local Rights as ‘Flagship’ Streamer Prepares for 2025 Launch
Pitaro says that the new ESPN streaming product known as “Flagship” will be priced to ensure Disney doesn’t lose money if viewers leave cable for it.
ESPN held its Media Days on Wednesday, at its headquarters in Bristol, Connecticut. It was one of the first opportunities for reporters to ask the network’s chair Jimmy Pitaro questions after a judge blocked Venu Sports — the joint venture streaming service brought to life by ESPN’s parent company Disney along with Fox and Warner Bros. Discovery — from reaching the market, and he gave his thoughts on the injunction decision, as well as a glimpse of what the new ESPN streaming service launching in 2025 could offer.
Key Details:
- Pitaro took the opportunity to reinforce his company’s position that Venu is a pro-consumer, pro-competition product.
- ESPN could pursue local rights for sports teams in the future thanks to the geolocating abilities of its new streamer.
- The new streamer will aim for a price that keeps Disney from having a preference as to whether viewers stream ESPN or get it from linear providers.
Pitaro was asked immediately for his thoughts on a ruling handed down by a U.S. District Court judge which granted a preliminary injunction against Venu. The injunction request was brought by Fubo, which is suing Venu on grounds that it violates antitrust laws.
“We do respectfully disagree with the court’s decision on the preliminary injunction and we are appealing…We believe that Venu is a pro-competitive service,” Pitaro said. “It is pro-consumer, pro sports fan … and we believe it’s giving the sports fan another option and it’s primarily directed at sports fans on the sidelines today, whether on sidelines because they cut the cord or never subscribed to the traditional ecosystem.”
Testimony from Pitaro may have been instrumental in helping ensure that Fubo’s injunction request was granted. While on the stand, Pitaro was confronted with evidence turned over in the discovery process which showed that Venu was likely to pull as much as two-thirds of its subscribers from current customers of pay-TV plans like Fubo, despite claims from Disney CEO Bob Iger that the service was primarily meant to target cord-cutters.
What Updates Did Pitaro Give on the New ESPN Streamer?
Pitaro also had the chance to speak on the new ESPN streaming service, which has a target launch date of 2025. The service has been dubbed “Flagship” by the company for now, while it considers a more permanent name for the platform.
One new tidbit dropped by Pitaro is the vision of the new ESPN streamer as a distributor for local sports rights as well as national. Because the new streaming service will have the ability to geotarget users and see where they’re watching from, it can offer things like NBA and NHL games in local markets the same way that regional sports networks currently do.
“We very much believe that Flagship should be part of the solution,” Pitaro said. “We’ve made that point to various leagues and commissioners that we are very interested in stepping up here. It doesn’t necessarily have to be in connection with Flagship. It can be an upsell as part of Flagship.”
Pitaro’s comments are timely indeed, as Diamond Sports Group recently stuck new deals with the NBA and NHL to broadcast games in local markets on its Bally Sports channels until at least the end of the 2024-25 seasons. MLB officials have made it quite clear they want to end their relationship with Diamond as soon as possible, and Pitaro’s comments could offer them an outlet if commissioner Rob Manfred can’t pull together an in-market streamer of his own as quickly as would be necessary.
Finally, Pitaro had a chance to speak on the price of the forthcoming Flagship platform. Previous reports have indicated that the service would cost around $25 to $30 per month, and while Pitaro did not offer concrete details to confirm or refute those reports, he did say that it would be priced in a way so that Disney would be agnostic as to whether a viewer signed up through the cable bundle to watch ESPN, or got it via streaming.
Disney makes $9.42 per subscriber for ESPN through cable distribution, so the average revenue per user (ARPU) of the new ESPN streamer would have to at least match that figure. At last report in May 2024, Disney revealed that ESPN+ had an ARPU of $6.30, so it’s logical to assume the price of Flagship will be greater than the $10.99 per month that ESPN+ costs, at the least.
The injunction against Venu was a big blow to Disney, but the company is still hard at work on bringing other streaming options to market. Flagship will presumably offer all the events currently found on linear ESPN channels, and it could soon be an outlet for fans to find locally-broadcast games as well as national contests.
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