One of the biggest questions in the North American sports media world over the past decade has been if and when ESPN would launch a full over-the-top offering including their main-network linear feed (and likely feeds from at least some of their other linear networks) directly to consumers. That idea had been discussed by external analysts for a long time, and had been mentioned by ESPN and Disney executives at least as far back as 2018 as a possibility under consideration for some unspecified future point.
But the discussion has really heated up lately. That started with ESPN and Disney executives publicly talking the idea up more (without fully publicly committing to it) over the past couple of years. The conversation then escalated a lot over the last month, with ESPN chairman Jimmy Pitaro calling it “a when, not an if” and Disney CEO Bob Iger saying “It’s a huge decision for us to make and we know that we’ve got to get it right both in terms of pricing and timing.” And this past weekend saw a bombshell from The Wall Street Journal that ESPN was “actively planning” this internally, and had already struck deals with a number of multichannel video programming distributors and with at least two leagues. Now, Andrew Marchand of The New York Post has more details on the timeline for this launch, which he expects to come in 2025 or 2026:
ESPN DTC timetable: ESPN is expected to go DTC in two to three years, according to sources. It is not happening this year. And, according to sources, at this point, it is unlikely to happen next year.
That makes the earliest start date 2025, though 2026 is a possibility. It is still expected to occur within the five-year time frame we initially reported [in September 2021].
However…: As ESPN chairman Jimmy Pitaro has stated on numerous occasions, there is no exact timetable. Pitaro and Disney are watching the market forces. There is no specific date to report.
That last caveat is important, as there are a variety of market forces that could impact this OTT launch. As previously discussed in our coverage of this, ESPN likely wants to do this in a way that doesn’t totally destroy the existing cable/satellite/virtual MVPD ecosystem, as they get an industry-leading $9.42 per-subscriber fee there for just ESPN alone (and get many other ESPN/Disney channels carried there as well through bundling, with those channels adding their own per-subscriber fees).
ESPN will make more per subscriber from a DTC product thanks to no MVPD middleman and a likely-higher price. Regional sports network options along these lines so far tend to cost $20-30 a month, and it seems likely ESPN’s offering will cost at least that if not more. But they’d have less overall subscribers if the MVPD bundle completely tanked; many people who still have those bundles (and thus, have their MVPDs pay ESPN per-subscriber fees) don’t watch ESPN regularly or perhaps even at all and would not buy the OTT offering.
And with an estimated 74 million homes still receiving linear ESPN through MVPDs last September, that’s an important revenue source to consider. So ESPN will want to do this in a way that provides the new offering (and lets them recapture cord-cutters) without destroying the old one. And price point will be a key there, and that will require extensive market research, including keeping an eye on how the RSNs that have made this pivot (including Bally Sports, NESN, and MSG) are doing in terms of linear and digital subscribers. Another element ESPN may consider is what’s happened in Canada, where national sports networks Sportsnet and TSN have had full-linear DTC offerings for some time (since 2016 and 2018 respectively), and thus far seem to be able to balance that with continued MVPD offerings.
There’s also the consideration of what this means for the current ESPN+ DTC service, which costs $9.99 a month and largely carries content that isn’t on linear ESPN. There are numerous ways that could go, including full integration of the linear feeds into a pricier ESPN+ (with or without a remaining cheaper option for just non-linear content), or continued separation of those services. There also needs to be some thought paid to how this new ESPN offering would fit with the Disney+ and Hulu bundle, and how to integrate all of these different OTT product offerings.
And maybe the most critical aspect of this is about rights. As Bally Sports+ has found, getting digital DTC rights from leagues is a difficult process. They’ve landed those league-wide (well, for all the teams they cover) for the NHL and NBA (although that latter deal comes with major caveats), but have only been able to do so with five of the 14 MLB teams they have linear rights for. That’s why ESPN is already striking deals with leagues years before a potential launch of this product.
But some leagues don’t even have their broadcasting futures determined for 2025 and beyond yet, perhaps especially the NBA: ESPN is expected to retain significant rights in the next deal there (which would start with the 2025-26 season), but that’s not guaranteed. So there are lots of hurdles still to be cleared before a full OTT launch of linear ESPN, and Disney is taking a methodical and deliberate approach to those, which makes sense. And that’s why this reported launch timeline is still quite a ways off. But it’s the clearest actual timeline we’ve seen yet, and it is earlier than some projected. It will be interesting to see if they hit it.
[Top photo of the ESPN Bristol, CT campus sign in 2014 from Joe Faraoni/ESPN Images]