The rollout of live sports on Warner Bros. Discovery’s direct-to-consumer streaming services has been deliberate domestically, frustrating many fans.
Since the launch of HBO Max (before its rebranding as Max), U.S. Soccer matches are the only live sports content available on the streaming service with any regularity. The federation struck an eight-year deal with WarnerMedia (before the completion of the company’s merger with Discovery) for home FIFA World Cup qualifiers, home friendlies, and other matches for the men’s and women’s teams in March of 2022. Those matches all air on Max, with simulcasts of some airing on linear networks TBS and TNT.
WBD Sports’ other main assets haven’t jumped to a direct-to-consumer streaming service. March Madness, MLB, NBA, and NHL games can’t be watched on Max and are only available on other apps requiring an authenticated login (March Madness Live, TBS, TNT apps).
However, the day might come when those sports are available on Max or another DTC service. Speaking on WBD’s earnings call on Thursday, CEO David Zaslav talked about sports on a subscription platform. Zaslav said that WBD owned “significant digital rights” domestically that had yet to be rolled out and that the company’s efforts in Europe and Latin America could be used as a guidepost in the United States.
We’re also a global leader in sports, including great sports rights from many of the top leagues in the U.S. that, in many cases, run through 2028 and beyond. We have the best digital and social sports platform for younger fans in Bleacher Report and we have significant digital rights in the U.S. that we’re not currently deploying but plan to in the future and that has a real chance to create meaningful strategic value.
We’ve had some good success in Europe and Latin America with layering sports into streaming with various business models. And this experience is informing our view on how to best deploy these sports rights here in the U.S. Our recent venture with BT in the U.K. is a great example, having merged BT Sport with Eurosport U.K. What is now called TNT Sports is available on both linear and streaming and bundled with discovery+, our current streaming entertainment product in that market. We believe there’s significant opportunity in the streaming space for sports and we look forward to leaning into this incremental growth avenue.
Later in the call, Zaslav again pointed to the company’s efforts across the pond, noting that WBD has put live sports on the platform and used an added tier for live sports.
First, when it comes to our sports rights domestically and globally, taken as a whole, we’re money good. So we have good deals with — here in the U.S. and around the world that are — that provide real value to us. One of the elements of those deals is that we own the digital rights to our sports. So we have the ability for no incremental cost to put that content on our platforms.
And we’re doing it in Europe. We’re doing it in different ways. In some cases, we’re doing it as an incremental tier. And in some cases, we’re putting it on the entire platform. And we’ve been at it now for about 1.5 years or 2 years and it’s pretty compelling. I’ve talked about news and sports as our artillery and a real opportunity for us. So we’ll be coming to you guys soon. We’ve been working this summer very hard. Number one, we wanted to get this platform right. We wanted to do no harm. Let’s get a transition. There was a fair amount of overlap. And we’ve got the transition; the platform is working exceptionally well. Consumers are very happy. Engagement is up.
One of our thesis of having how well this overall mix of content will work. Directionally, it’s very — it looks like it’s working. More than 20% of the viewership is going to some of the more diverse content in different time periods. We still have a lot of work to do. We’re early on. But news and sports are important, they’re differentiators, they’re compelling and they make these platforms come alive. And that’s — if you’re on an SVOD platform and something that’s going on in the world and you could see it, it has that platform — makes that platform really alive. So you will hear from us on that soon.
CEO and President of Global Streaming and Games Jean-Briac Perrette also chimed in and indicated that an incremental model would be how WBD would go regarding live sports in the US.
I mean I think as David alluded to earlier, in sports, we have a mix of models today across. Largely in Europe, it is priced in an incrementally priced tier. In LatAm, we have some sports bundle, a mix there as well. We have some local football or soccer in a separately priced tier. We have Champions League in Mexico and Brazil, priced within the entertainment offering. I think generally, our view is sports is a such a premium offering with a very focused and passionate fan base. But generally, the model will require some way to find — need to find incremental value to get out of it. And so exactly how that comes to market, we will have more to say later in the year.
But generally, our view is that it needs to be monetized incrementally, let’s put it that way.
Throughout the call, Zaslav and Perrette mentioned that a plan would be finalized and revealed in time.
Overall, WBD rolling out some semblance of a plan for live sports on its DTC offerings is a positive step. Nuggets have surfaced over the years about more live sports eventually streaming on a WBD DTC service, from the announcement about the company’s NHL deal including “live streaming and simulcast rights for HBO Max,” and VP of emerging media and innovation Peter Scott said, “it might be a destination down the road to put NBA games on HBO Max” in March of 2022. Scott left the company earlier this year and is now the Chief Strategy Officer at Play Anywhere, Inc.
With the MLB Postseason starting in early October, the NHL regular season beginning in mid-October, and the NBA regular season following later in the month, we’ll see if Warner Bros. Discovery can unveil a plan in the next two months.
[Transcript via Seeking Alpha]
