Discovery Global is planning a “standalone product” that can be taken directly to the consumer; the ESPN direct-to-consumer offering will not have universal pay television authentication at launch; and Mark Shapiro divulges that WWE could have garnered more for PLE rights by going with another partner. Plus news on The Athletic, Warner Bros. Discovery financials post-NBA, the Southland Conference and ESPN LA 710.
Wiedenfels: “Standalone product” planned that can be taken direct to the consumer
Discovery Global, the company consisting of linear networks soon to be spun off by Warner Bros. Discovery, is planning a “standalone product” to utilize its streaming rights, WBD CFO Gunnar Wiedenfels said during the company’s quarterly earnings call Thursday. Discovery Global will include the TNT Sports networks upon the close of the spinoff transaction next year.
“Luis [Silberwasser] and the team are working hard on developing the go-to-market approach to utilize our streaming rights going forward, and the broad strokes are it’s going to be a standalone product that we will be able to take direct to the consumer, but also bundle with HBO Max, with Discovery+, potentially third parties — again, all in the spirit of making our content available to as many people as possible,” Wiedenfels said, who will be the president and COO of Discovery Global. “So lots to work through, and stay tuned.”
TNT Sports started offering its content for customers of the then-Max streaming service in 2023, including MLB, NHL, NASCAR and more. “We’ve got a very, very strong portfolio — all the key franchises — and it’s going to be even more important as we look at Discovery Global as a separate, standalone entity, so we will continue with an important sports strategy,” Wiedenfels said. “We will continue to be looking at investments with the same discipline that we have in the past, and with that, I think it’s unlikely that we will sublicense rights out.”
ESPN DTC will not be available for authentication on all pay TV services at launch
The ESPN direct-to-consumer streaming service will not initially be available for universal pay television authentication, as first reported by Alex Sherman of CNBC. While Disney has been successful in garnering the necessary rights from providers such as DirecTV, Fubo, Charter, Verizon Fios, Hulu and other small operators, there are a variety of other services that are not currently slated to offer the new service upon its launch.
Sports Media Watch has learned that discussions with other major distributors are ongoing and that most of the pay television domain is expected to have the necessary rights later in the year. Sherman reported that some of the platforms that do not possess the entitlement rights include Comcast Xfinity, YouTube TV and Sling TV, along with Cox cable and Dish satellite television.
The Walt Disney Company has carriage deals with a variety of pay television providers; however, there have been disputes ahead of the last two season premieres of “Monday Night Football” with Charter Communications (2023) and DirecTV (2024). Disney and Charter came to terms on an expanded carriage agreement this past June that granted TV Select users access to the ad-supported version of Hulu and ESPN DTC service.
The ESPN direct-to-consumer application will grant authenticated users access to ESPN networks, including live game broadcasts, studio programming and other exclusive events. Starting next year, the platform will air premium live events from WWE, and it could eventually include NFL Network should ESPN’s sweeping deal with the NFL receive the proper approvals and close. ESPN will also unveil enhancements to its mobile and connected television applications that span beyond what the linear television channels can provide.
Shapiro discusses WWE deal with ESPN
TKO Group Holdings president and COO Mark Shapiro said during an earnings call Wednesday that the company could have obtained a “slightly higher rights fee” for the WWE PLEs that ESPN acquired for $325 million/year, but chose to go with the company because of the strength of the brand, its reach, audience and direct-to-consumer strategy. The media rights contract is a five-year pact worth a total of $1.63 billion, representing a 78% increase over its previous deal with Peacock that expires next March.
“We will stream all 10 PLEs over the course of the year powered at times by linear, and I want to underscore that because that could get lost in the messaging,” Shapiro said on a quarterly earnings call. “The idea of having a ‘Money in the Bank,’ a ‘SummerSlam,’ a ‘WrestleMania,’ take your pick from our PLEs, with the first hour or even two simulcast on ESPN linear and the D-to-C with a handoff to their direct-to-consumer, you just can’t beat that proposition. And of course, that’s driven by the fact that ESPN’s linear platform is absolutely unmatched in the industry.”
TKO Group Holdings began talking to companies around the same time as it started rights talks for UFC, which he said are now in the “homestretch.” UFC matches have aired on ESPN+ since 2019 under a five-year media rights deal worth a reported $1.5 billion, but it should be noted that the mixed martial arts league was not part of TKO Group Holdings at the time.
“On the ESPN side, they saw this as big-audience content that travels to any platform,” Shapiro said of the WWE PLE deal. “They were firm in agreement that both WWE and the UFC content for that matter attracts new subs, attracts cord-nevers … They saw that with our content, and they also knew we were the antidote to churn, and of course that track record with UFC and what we built at ESPN+ played into our favor.”
Plus: The Athletic, WBD-NBA, Southland Conference, ESPN LA 710
- The New York Times Company will no longer be “breaking out” quarterly earnings results for The Athletic beginning in the next fiscal quarter. For the second quarter, the sports news website garnered adjusted operating profit of $5.8 million, an improvement from the $2.4 million loss it registered last year, due to augmented revenue emanating from subscriptions, advertising and licensing.
- WBD CFO Gunnar Wiedenfels said in the company’s earnings call that he expects the loss of its NBA rights package to result in a “roughly $100 million sports cost benefit” in Q4. Moving into next year, Wiedenfels added there would “be a net benefit of hundreds of millions of dollars” associated with the loss of those rights and offsetting revenue losses.
- The Southland Conference and ESPN have reached a six-year media rights extension, it was announced on Thursday. Under the enhanced agreement, ESPN is guaranteeing to televise five annual events on its linear networks, including the women’s basketball championship game and one men’s basketball semifinal game.
- ESPN LA 710 will continue airing Los Angeles Lakers games under an extension of their radio broadcasting agreement. The Good Karma Brands-owned station has aired Lakers games since 2009, and broadcasts will continue to feature John Ireland and Mychal Thompson.
