Fox's Lachlan Murdoch at Super Bowl LI in 2017, next to Fox News and Fox Sports logos. Fox’s Lachlan Murdoch at Super Bowl LI in 2017, next to Fox News and Fox Sports logos. (AA photo illustration/Murdoch photo from John David Mercer/USA TODAY Sports.)
DisneyESPNFoxPoliticsStreamingTNT SportsWarner Bros. DiscoveryBy Andrew Bucholtz on

The initial reports Tuesday on a forthcoming joint streaming sports venture from Fox, Disney’s ESPN, and Warner Bros. Discovery’s TNT Sports were scant on details on just what would be included and how this would work with existing offerings. The companies’ shared press release later that day clarified a few things, including that the plan is to launch this this fall and include both their linear networks and certain direct-to-consumer services, but many questions remained.

However, Fox CEO Lachlan Murdoch provided some further insight on his company’s Q2 (for them, that’s the three months ending Dec. 31, 2023) earnings call Wednesday. There, he discussed how the plan here is to target those outside of multichannel video programming distributor (MVPD: cable, satellite, or virtual MVPD) bundles, and how he doesn’t find this terribly risky for Fox News (which would seemingly have a lot to lose if current bundle subscribers who don’t want that content choose a sports-only package instead). Here’s some of what he said, via Joe Flint of The Wall Street Journal and Brian Steinberg of Variety:

Murdoch’s comments there are helpful for furthering the discussion on how this package is aimed at those who don’t have MVPD packages, which bolsters the language in the release of “aiming to provide a new and differentiated experience to serve sports fans, particularly those outside of the traditional pay TV bundle.” And with the inclusion of all these linear networks, something that was not highly featured in the initial pre-release reporting, there’s definitely a chance at bringing in some of those people.

And that 60 million homes number cited there a. sounds about right based on Nielsen TV universe/pay-TV universe estimates, and b. isn’t much smaller than the 80 million homes pay-TV universe (and only about 70 million of those homes had ESPN and FS1 in December.) So there’s certainly a potential market there based on that alone.

But there’s a notable market here that Murdoch isn’t emphasizing. That’s those who do currently have MVPD bundles mostly for linear sports broadcasts, and might switch to this offering if it’s cheaper (a key point yet to be determined). All the snarky Twitter comments of “we have this, it’s called cable” miss that this is actually the type of sports-specific skinny bundle that many have long lobbied for in place of current cable packages, which typically force consumers who want linear ESPN, FS1, and TNT to also subscribe to the likes of Fox News, MSNBC, and CNN, even if they never watch those channels. And that has never really been offered; there have been skinny bundles, but they usually have offered next to no sports.

And that bundle setup has allowed those networks’ parent companies to pull in big money in per-subscriber fees, even if some of those subscribers only watch for the sports channels included rather than the news or entertainment ones. Of course, this is even more protracted in reverse for those who want news and entertainment and don’t care about sports. ESPN’s linear per-sub fee is around $10 a month for the main channel or around $12 for the whole family, versus Fox News’ around $2.

But on the entertainment side, much of the content is available on over-the-top streaming services outside of the bundle. And more and more of the news content is going that way as well. That hasn’t been the case in sports. And many people who do want bundles for sports have been quite vocal about not wanting particular news and politics content often included in those bundles, whether that’s Fox News (as seen in the aforementioned link on their per-sub fee), Newsmax, CNN, and/or MSNBC.

Sports is starting to take a few steps towards non-bundle availability. There’s been plenty of streaming-exclusive content, and some of the linear content is starting to show up on streaming as well. That includes WBD’s B/R Sports Max add-on, ESPN+ carrying some linear ESPN/ABC events, and ESPN planning a full linear direct-to-consumer launch (which is still targeted to happen in 2025, separately from this joint venture).

But Fox has had no DTC plans for FS1 to date. And while their broadcast Fox content is available with an over-the-air antenna, many still want it in bundles as well for ease of access. So this is really the first time they’re actually taking the “consumer-first and distribution-agnostic” approach Murdoch describes there when it comes to people who don’t want a traditional MVPD bundle. There’s a reason leading analysis firm MoffettNathanson called this “The Skinny Sports Bundle We have Been Waiting For” in a shareholder letter.

And it’s going to be really interesting to see what that means for those traditional bundles, with some already wondering what the impact will be on sports-emphasizing MVPDs such as YouTube TV. And we’ll find out if that risk to Fox News (and similar highly-bundled news and entertainment channels) from this plan is indeed “low.”

 

About Andrew Bucholtz

Andrew Bucholtz has been covering sports media for Awful Announcing since 2012. He is also a staff writer for The Comeback. His previous work includes time at Yahoo! Sports Canada and Black Press.

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