Why Local Affiliate Owners Are Concerned About Joint Venture Sports Streamer from Disney, Fox, WBD
The three companies neglected to share their JV streaming plans with affiliate partners and sports leagues, and now they’re drawing fire from multiple angles.
The dust still has not settled from the announcement that Disney, Fox and Warner Bros. Discovery intend to combine the broadcast and cable channels they own on a new streaming service by this fall. The Department of Justice has announced it will review the streamer for possible antitrust concerns, and the live TV streaming service Fubo has filed a lawsuit against the three companies involved in its creation. A report from TV News Check indicates that owners of local affiliates of channels like ABC and Fox, which are intended to be placed on the new service are also wary about its creation, to say the least.
- Affiliate owners see the JV sports streamer as diluting their negotiating power with cable and satellite companies.
- Some channel operators don’t see how the platform will attract a wide enough audience to be successful.
- Others want to see their networks added to the streaming service if it manages to survive lawsuits and DOJ probes.
The proposed streaming service from Disney, Fox and Warner Bros. Discovery will feature full live streams of ESPN, ESPN2, ESPNU, SEC Network, ACC Network, ESPNews, ABC, Fox, FS1, FS2, Big Ten Network, TNT, TBS, truTV , and all content from ESPN+. It’s not yet clear if the streamer will pull local affiliates of ABC and Fox from every market onto its platform, or if it will have national feeds of those channels.
Local affiliate owners are preparing for the former option, and they have serious concerns about the proposal. Graham Media Group CEO Catherine Badalamente says that networks often cite the high cost of sports rights in seeking higher fees to keep channels affiliated, but cable and satellite companies see the further spread of their channels on new streaming services and try to demand to pay lower retransmission fees as a result. That leaves affiliate owners stuck in the middle, forced to pay more to remain an ABC or Fox station while being asked to take less for their retrans rights from cable distributors.
“Strategically, this is yet another example of these media companies actively undermining the foundation of their core business and frankly far too late an effort to get a Netflix-like valuation on their stock prices,” an unnamed senior media executive told TV News Check.
Other affiliate owners have pointed out that, despite the large amount of sports that would be offered on the JV streaming platform, its inventory is incomplete. One Allen Media Group executive pointed out that the streamer is missing NFL packages owned by CBS and NBC, and considering the NFL is seeking legal loopholes that may allow it to keep its Fox and ABC/ESPN packages off the streamer as well, concerns about the amount of content it offers could be well-founded.
“If you look at this product through the eyes of the consumer, you’re missing the sports on NBC, CBS — that’s a lot of NFL football, that’s Big Ten football and basketball, the Masters, the Olympics every couple of years,” Gray Television co-CEO Pat LaPlatney said. “That’s a whole lot of sports you’re not going to be able to pick up on this new venture.”
Will Channel Owners Try to Get Themselves Added to JV Sports Streamer?
Despite the protestations, some local affiliate owners see an opportunity when they look at the JV sports platform as well. Scripps struck a deal with the WNBA last year to offer games via ION on Friday nights, and Scripps CEO Adam Symson sees plenty of potential for a deal between Scripps and the three companies behind the JV streamer to add Ion to their lineup.
“I would hope if this new company cares about women’s sports that they would recognize that they’d have to sit across the table from us and carry Ion,” he said.
In the end, many of the objections from channel owners are the byproduct of the evolution of the media business. The shift to streaming was always going to leave casualties behind it, and the former method of distributing broadcast networks through a vast network of affiliates who are unable to negotiate retrans agreements with cable and satellite companies on their own may not be viable any longer. That’s a hard reality to face for executives who have spent their careers profiting from the old way of doing things.
There are ways for affiliate owners to profit from the launch of the JV streaming service, but it will no doubt shake up business practices for many of the largest channel-owning companies. Some are clearly willing to work with Disney, Fox, and WBD, despite their concerns that the JV streaming service will make it harder for local affiliates to operate under the current system.
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