Disney expects all sports streaming to come on streaming

53
2
Disney expects all sports streaming to come on streaming

All ESPN-related sports broadcasts will be available on streaming through ESPN he hinted during the company's most recent earnings call.

When asked if the company had considered moving all of its sports broadcasting products over to the streaming platform, Chapek said that we're sort of putting one foot on the dock, if you will, and one foot on the boat right now. We know that we'll be able to fully go into an ESPN DTC direct-to- consumer offering when we're good for our shareholders. We fully believe that there is a business model there that will allow us to regain full DTC expression on ESPN. DTC means that the viewers can watch the games directly on the ESPN app, thus cutting out traditional linear cable broadcasts, like the NBA Finals on ABC or the Stanley Cup Playoffs on ESPN. It will be the ultimate fan offering''

Wells Fargo Securities senior analyst Steven Cahall, who asked Chapek about the ESPN spinoff on the earnings call, told Yahoo Finance this would be a positive sign for investors. That day is coming, Cahall told Yahoo Finance Live. In the past year, ESPN added more content on the platform, including additional PGA Tour and NBA coverage, and acquired NHL s broadcasting rights. The NFL's Thursday Night Football will be broadcast on Amazon AMZN this fall. NBC s Peacock CMCSA streamed premium Olympics coverage and has also started broadcasting MLB games. Apple AAPL is streaming select MLB games and is currently in talks for the NFL's Sunday Ticket package.

Many of the other companies Disney is battling for streaming eyes don't have strong linear cable ties, like Disney with its ABC brand.

Chapek noted that Disney is hesitant to move too much content from cable to streaming because of the current profit deriving from linear cable. In the second quarter of 2022, Disney's linear networks brought in an operating income of $2.8 billion, while the company's Direct-to- Consumer sector, which includes Disney and ESPN, lost $887 million.

Chapek said that we're not ready to share the specifics of our model in terms of how long it takes for us to reach profitability or the impact that it would have on our linear business. I would emphasize that we're only going to do it if it's accretive to our shareholder value when it comes time to pull the trigger. It is going to be the ultimate fan offering that appeals to super fans that love sports. I think there's nobody but ESPN that could pull that off. We don't have a lot of specifics when it comes to structure.