Despite the competition, ESPN wants to be the hub for all live sports streaming

It has been announced that Disney's ESPN will be the hub for all live sports streaming, regardless of who its competitors are.

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ESPN has spoken with major sports leagues and media partners about launching a feature on ESPN.com and its free ESPN app that will link users directly to live streams of sporting events.

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This could be a national or international streaming service, such as Apple TV+ and Amazon Prime Video, or a regional sports service, such as Sinclair's Bally Sports+ or Madison Square Garden Entertainment's MSG+, or both.

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As of now, it isn't known exactly which media partners will be involved, and there is also no timeline as to when such a feature will be launched, according to the people, who asked not to be named because the discussions are private. In spite of this, ESPN has approached the major sports leagues and media companies to find out what kind of enthusiasm they have for the idea, the people said.

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ESPN has considered a business model in which it would take a cut of subscription revenue from a user who signed up for a streaming service through the ESPN app or website, two people said, although the business terms of the concept are still subject to change. People familiar with the matter told me that if a customer already subscribes to a service, ESPN would not collect any money and just provide the link to them as a courtesy.

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In addition, ESPN may also alert users to games that are broadcast on linear TV, cementing ESPN's new role as the TV guide of live sports, according to people familiar with the matter.

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ESPN declined to comment.

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Some of the owners of regional sports networks have expressed particular optimism about the idea as they try to boost subscription revenues while at the same time leagues are questioning the larger industry's business prospects in a streaming-dominated environment, the two people said. Previously, Trade Algo reported that Sinclair's Diamond Sports Group was contemplating bankruptcy restructuring after failing to pay off a $140 million debt owed to it. The leagues have been notified by Warner Bros. Discovery that the company is planning on exiting the RSN business altogether, according to Trade Algo.

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De-cluttering sports

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Sports leagues are carving up rights packages among streaming partners to maximize carriage fees. Consumers find it increasingly difficult to find a given game. For a New York-area Yankees fan, a game on the New York Yankees can be viewed on linear TV on the YES Network, ESPN, or Warner Bros. Discovery's TBS, or it can be streamed on Amazon Prime Video, Apple TV+ or NBCUniversal's Peacock platform.

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In the coming years, ESPN will use its self-professed position as "the world's leading sports network" to become the de facto first stop for consumers who want to know where to watch live sports, the sources said. ESPN only links users to ESPN-licensed content as of right now. The number equals almost 30% of the total amount of televised or streamed U.S. sports, according to people familiar with the issue.

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The fact that ESPN is willing to market other streaming services suggests that ESPN is shifting its strategy when it comes to the streaming wars. There is less focus on Disney's goal of gaining streaming subscribers - and eyeballs - at all costs as of late. There has been a growing trend among media companies, including Netflix and Warner Bros. Discovery, in the recent past to focus on revenue and profit rather than subscriber growth, and executives at the company have emphasized the importance of this.

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Since streaming growth has slowed, media companies have also begun trading in lockstep. Consequently, there was a reduction in competitive pressures as well as a promotion of working together. Similarly, Disney and Warner Bros. Discovery are putting a lot of emphasis on licensing their content to rival streaming services as a way to increase revenue rather than keeping the content exclusive to them.

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Earlier this month, Disney CEO Bob Iger announced that ESPN would become a standalone division under the leadership of ESPN Chairman Jimmy Pitaro, as part of a company-wide reorganization. It is expected that the move will bring a closer look at ESPN's finances during earnings calls. Pitaro announced Wednesday that he was streamlining management beneath him so that his number of direct reports would be reduced.

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Iger said there are no plans to spin out or sell ESPN, despite activist investor Dan Loeb last year calling for Disney to do so.

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