ESPN to widen its sports streams

Published on Sunday, 13 August 2017 21:30
Written by SUSAN CORICA

STAFF WRITER

BRISTOL - ESPN’s new multi-sport video streaming service is set to debut in early 2018.

The Walt Disney Co., ESPN’s parent company, has announced that it has agreed to acquire majority ownership of BAMTech LLC in order to launch the new service.

BAMTech is considered a global leader in direct-to-consumer streaming technology and marketing services, data analytics and commerce management. Disney will pay $1.58 billion to acquire an additional 42 percent stake in the company from MLBAM, the interactive media company of Major League Baseball, according to a statement released by ESPN.

Disney had previously acquired a 33 percent stake in BAMTech under an agreement that included an option to acquire a majority stake over several years.

Analysts say Disney is trying to set itself and ESPN up for a future that’s largely been framed by Netflix: providing the stuff you want to watch, when you want to watch it.

“They’re bringing the future forward. What they talked about were things that looked inevitable, at some point,” said Pivotal Research Group analyst Brian Weiser. What’s less clear is if Disney will be able to make big bucks from it, he said.

This is important as the decline in cable households and the shift to smaller, cheaper bundles pressures the profitability of Disney’s cable networks. Fewer subscribers and fewer viewers mean less money. In the nine months through July 1, cable networks’ operating income fell 13 percent from the year before, to $4.12 billion.

Earlier in the year, ESPN announced the layoffs of about 100 anchors, reporters, analysts and production staffers.

“The media landscape is increasingly defined by direct relationships between content creators and consumers, and our control of BAMTech’s full array of innovative technology will give us the power to forge those connections, along with the flexibility to quickly adapt to shifts in the market,” said Robert A. Iger, Disney’s chairman and chief executive officer.

The ESPN-branded multi-sport service will offer a wide array of programming, featuring about 10,000 live regional, national and international sporting events a year, including Major League Baseball, the National Hockey League, Major League Soccer, Grand Slam tennis and college sports. Some individual sport packages will be available for purchase, according to the ESPN statement.

“The new service will be accessed through an enhanced version of the current ESPN app. In addition to the multi-sport service, the ESPN app will include the news highlights, and scores that fans enjoy today,” the statement said.

ESPN will not be streaming pro football or basketball, at least initially.

“Ultimately, we envision this will become a dynamic sports marketplace that will grow and be increasingly customizable, allowing sports fans to pick and choose content that reflects their personal interests,” Iger said on a conference call with analysts.

Disney will have to be careful that it doesn’t transfer too much sports programming from its TV channels to the app. Getting the balance wrong could upset cable companies and weigh on the price they pay Disney for ESPN, Weiser said.

The new ESPN service will be followed by a new Disney-branded direct-to-consumer subscription streaming service in 2019, intended to feature the newest live action and animated movies from Disney and Pixar and other content. With this strategic shift, Disney will end its distribution agreement with Netflix for streaming of new releases.

Plans are for the ESPN and Disney streaming services to be available for purchase directly from ESPN and Disney, in app stores, and from authorized video programming distributors.

John Skipper, ESPN president and co-chairman of Disney Media Networks, will manage the new ESPN-branded service.

The new streaming services will likely “accelerate the erosion” of Disney’s TV networks, especially if other major cable networks make similar moves, said Moody’s analyst Neil Begley.

But Iger argues that BAMTech gives Disney “optionality” if the cable ecosystem changes further, Iger said on a conference call with analysts recently. If there’s greater “erosion,” the company has more ways to get its entertainment directly to customers, Iger said.

Associated Press reports were used in this story.

He said there are no current plans to sell the Disney or ESPN TV channels directly to customers on the apps.

But having a direct relationship with customers tells Disney exactly what they’re watching, giving it powerful tools and information that could help feed decision-making and, on the sports side, sell advertising.

Headquartered on Route 229, ESPN has consistently been the top taxpayer in Bristol by far for years, accounting for 5.69 percent of the city’s tax base in the most recent Grand List, which was just released. Its land and property in the city were assessed at a total of $222,486,506.

By agreement with the city, the taxes increase each year on ESPN’s Digital Center 2, which first appeared on the tax rolls in 2014. By 2020, ESPN will pay 100 percent of the real estate tax rate, according to the agreement, Assessor Tom DeNoto has said.

Susan Corica can be reached at 860-973-1802 or scorica@bristolpress.com.



Posted in New Britain Herald, Business, General News, General Sports on Sunday, 13 August 2017 21:30. Updated: Sunday, 13 August 2017 21:32.