Disney stock surged nearly 1.5% Thursday morning, following multiple reports it plans to launch an ESPN-specific streaming service as a standalone subscription-based live sports package, reconfiguring the way Americans consume live sports and dealing the potential nail in the coffin for cable sports.
ESPN reportedly plans to launch a live sports streaming service.
Getty Images for ESPN
Key Takeaways
- Shares of Disney, ESPN’s parent company, rose 1.30% Thursday morning to $93.98, after sources told MarketWatch and the Wall Street Journal ESPN is planning to launch the service, known by the internal code name: project “Flagship.”
- The launch date has not yet been made public, though it follows months of speculation around an ESPN streaming service—Disney CEO Robert Iger said in February he predicts ESPN will “one day” transition to a strictly streaming service.
- ESPN, which first entered the streaming arena in 2018 with ESPN+ to stream limited MLB and NHL games and some commentary programming, is expected to make available its entire programming lineup in the streaming service—as it stands now, ESPN+ does not give subscribers full access to ESPN or the NBA or NFL games it broadcasts.
- Sources told the Journal ESPN would still be available as a TV channel after the launch of its streaming service.
Key Background
The advent and proliferation of streaming services and the decline in cable has prompted sports leagues and traditional cable networks to reconsider the longstanding model of live sports. The NFL—the biggest sports league in the U.S.—moved its Thursday Night Football games from Fox Sports and the NFL Network to Amazon Prime and introduced a playoff game exclusively on NBCUniversal’s streaming service Peacock. ESPN+ and its rival Fox Sports are available on Hulu and FuboTV, which focuses specifically on live sports. As of April 1, ESPN has 25.3 million subscribers to ESPN+, an increase of roughly 400,000 over the previous three months. Apple TV+, which streams Friday night MLB games, is also reportedly considering a foray into streaming live college sports.
Big Number
$8.15. That’s how much ESPN charges per subscriber each month in license fees to TV operators, a rate that has grown over the past 10 years by roughly 5.6% per year, according to data from S&P Global Market Intelligence.
Tangent
ESPN is among a growing list of outlets and TV networks that have conducted layoffs in recent months, announcing plans in April to cut an unspecified number of jobs, ESPN president Jimmy Pitaro announced. Those layoffs are expected to affect its management positions, Sports Business Journal reported.
This story was first published on forbes.com and all figures are in USD.
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