Breaking: Disney Reportedly Has Begun Negotiations to Roll Out Streaming-Only Version of ESPN
The process has begun. After seeming like no more than a pipe dream for years, a streaming-only version of ESPN is on its way to consumers. That’s according to the Wall Street Journal, which reports that Disney has officially started laying the groundwork to sell the channel as a subscription streaming service in the coming years.
This will give users what they have been clamoring for since before the release of ESPN+; a way to stream all of the programming from the worldwide leader in sports without a cable or satellite contract. There is no firm timeline for when a standalone, streaming ESPN will be available to consumers, but Disney has dug into the dirty work of making it happen.
That work includes making deals with pay-TV providers to secure the contract flexibility necessary to launch an ESPN streaming service. The channel is a big draw for cable and satellite users, with one 2022 survey finding that 78% of adults rated ESPN as a “must-have” to justify a pay-TV subscription. Disney would reportedly still offer ESPN as a cable channel after launching a streaming version, but that will only help its case so much with providers. Given the channel’s popularity, and the difficulty cablers are having in retaining customers as it is, providers are going to take some convincing to give Disney the flexibility it needs to offer ESPN as a streaming-only product.
But conversations are ongoing, and the WSJ reports that Disney has come to agreements with some providers, though the terms of those deals were not disclosed. Disney also has to get approval from the sports leagues whose broadcasting rights it owns, as the values of its deals with those leagues are based in part on traditional TV viewership metrics. Talks are progressing, however, and ESPN already has permission from at least two major leagues, according to sources close to the matter. All of these discussions may take a while to finalize, given just how monumentally offering a streaming-only ESPN would change the entertainment landscape.
Disney executives know how badly their users want a streaming-only version of ESPN. Last May, former CEO Bob Chapek said such a product would be “the ultimate fan offering.” Chapek was shown the door by Disney’s board in November, and previous CEO Bob Iger was reinstalled in the top spot at the company. But Iger is also bullish on offering ESPN as a direct-to-consumer (DTC) option, and called such a move “inevitable” in February. ESPN’s chairman Jimmy Pitaro stated in early May that it was a question of “when,” not “if” ESPN would be offered as a streaming product, but the financials would have to make sense from Disney’s perspective.
The financial tipping point might finally have been reached, however. Major cable channels across the industry are hemorrhaging viewers, and even ESPN has not been immune. It lost more than 900,000 customers between December and June due to cord-cutting, around 1.2% of its total customer base. ESPN is about as bulletproof a channel as they come, but considering that pay TV lost 6 million subscribers in 2022, there’s only so much even the most popular networks can do to stem the tide of cord cutting.
The move to make ESPN a streaming product would require significant investment from Disney, a company that is already grappling with big losses from its streamers. Such a product will likely be significantly more expensive than the $9.99 per month the company charges for ESPN+. Because ESPN carries so many more live games from the NFL, NHL, NBA, and MLB than ESPN+ does, such a service will likely run closer to between $20 and $30. Local sports streaming services like NESN 360—which offers Boston Red Sox and Boston Bruins games to users in the New England area— fall within this price range, and although a streaming ESPN will have a much larger customer base, it will also have much larger financial obligations to sports leagues.
There are still a metric ton of unanswered questions about a streaming version of ESPN. But sports fans across the United States can rest assured, their frequent pleas have been heard. Disney is getting ready to launch a DTC version of ESPN, a move that will have seismic consequences for the pay-TV industry at large.
ESPN+
ESPN+ is a live TV streaming service that gives access to thousands of live sporting events, original shows like Peyton’s Place, the entire library of 30 for 30, E:60, The Last Dance, as well exclusive written analysis from top ESPN insiders. Sports available on ESPN+ include NFL, MLB, NHL, UFC, College Football, F1, Bundesliga, PGA Tour, La Liga, and more.