Comcast, Charter and others are worried about new Mega Sports Streaming Service

Some of the biggest leaders in sports – Disney, Fox, and Warner Bros Discovery – announced a joint venture for a mega-sports streaming service earlier this month. Since that announcement, we’ve been hearing from Pay TV providers as well as local TV providers about what this new venture could mean for their business.

Last week, we heard from Gray TV that they were not too fond of the joint streaming service unless they were to get paid. Gray TV gave some pretty compelling reasons in their statement, too, like the fact that local sports are streamed via local channels and broadcasters pay for these broadcasts. For Disney, Fox, and WBD to take that away without any monetary compensation would result in job losses for local economies.

Now, larger Pay TV services like Comcast, Charter, and DirecTV are making their voices heard. The primary question the three have is whether they’ll be able to offer the same skinny bundle of linear networks that Disney, WBD, and Fox announced as part of this streaming service, which includes ABC, ESPN, ESPN2, TNT, TBS, Fox, FS1, and FS2, among a few other cable channels that showcase sports.

If Pay TV providers are able to offer a skinny bundle with these sports services to customers, then there’s likely to be little pushback. However, if they aren’t able to and have to carry these channels in their basic cable subscription, which will likely cost much more than the joint service, there’s going to be quite a bit of pushback.

Disney, Warner Bros Discovery, and Fox all rely on Pay TV for a bulk of their revenue

It’s doubtful that the joint sports streaming service will allow Pay TV providers to offer a competitive skinny bundle. The three companies get a majority of their revenue from Pay TV through these deals that they’ve struck with Pay TV providers. Disney, for example, forces Pay TV providers to carry all of their channels instead of just some. So YouTube TV would need to carry all 14 of Disney’s channels, versus just carrying the handful of ESPN channels – which cost the most to carry.

Obviously, some Pay TV providers can benefit indirectly from this new venture, but it would likely cause a lot more cable TV cancellations, which is kind of the point of this service. Sports streaming has been pretty lacking over the last few years. But for companies like Comcast and Charter, this would mean more broadband sales, as this streaming service is going to need high-speed internet. So not only more internet subscribers but more people paying for the higher-speed packages, which would bring in more profit for those companies.

It’s still in the early stages of this service, though it is expected to launch in the fall of 2024. So Disney, Warner Bros Discovery, and Fox are going to need to figure things out pretty quickly. This is likely expected to launch in time for the NBA and NHL 2024-25 seasons, which start around October.