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Disney Shifting Focus To Digital Products, What Does It Mean For ESPN?

“ESPN+ costs $5.99 per month and watching Watch ESPN content requires a cable or satellite subscription.”

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Disney CEO Bob Chapek was on CNBC on Monday to talk about the company’s future business plans. Earlier in the day, the company had issued a press release saying that it was restrutcturing to make its direct-to-consumer digital products its focus.

“We believe we’ve got the opportunity to build upon the success of Disney+, which by almost any measure has been far and above anybody’s expectations,” he told CNBC.

Chapek would not give any subscriber numbers or future projections for the company’s digital products. He did say that Disney+, ESPN+, and Hulu all have exceeded the company’s expectations and continue to do so each month.

Covid-19 has taken a serious bite out of other divisions in the Walt Disney Company this year. Its global theme park business has been in the toilet. Multiple feature films have been scrapped, delayed, or in some cases, forced to a pay-per-view model on Disney+, which lead to significantly lower revenues than initially projected. The streaming businesses are thriving though.

So what does this mean for ESPN and the sports world? Outkick’s Ryan Glasspiegal writes that the effect may not be obvious right away, but the model for live sports will eventually evolve.

“An emphasis on direct-to-consumer streaming will inherently mean further movement away from their previous modes of distributing movies through theaters. It will probably happen a little slower, but sports will also continue to migrate away from traditional TV networks.”

All cable networks have been hit hard by cord-cutting, which isn’t a new phenomenon, but the ESPN family of networks’ subscriber fees are the highest in the industry, meaning that fewer cable subscribers hits that network harder than any other. With 20 million fewer subscribers than the network had just ten years ago, it is missing out on about $20 million in revenue each month that it used to count on.

News broke last week that ESPN is bracing for a major round of layoffs. It seems inevitable given that revenue is down and recent stories about negotiations with the NFL and Major League Baseball prove that rights fees for live sports are not following suit.

So what does that mean for the future of the cable network? It is hard to say exactly. ESPN+ has slowly increased its offerings both in terms of live sports and original content. The service also has a pay-per-view deal in place with the UFC. Between it and the Watch ESPN offerings through ESPN.com, it isn’t impossible to think that the network could become a completely digital product.

In order for that to be successful, ESPN will have to figure out how to package and sell a subscription. ESPN+ costs $5.99 per month and watching Watch ESPN content requires a cable or satellite subscription.

Figuring out a fully digital pricing model is something ESPN should probably figure out how to do sooner rather than later anyway. We may be a few years away from leagues selling exclusive video rights to digital companies, but Amazon already has deals with Thursday Night Football and the New York Yankees amongst others. Apple is reportedly kicking the tires on PAC-12 football. We are far enough down the road that exclusive rights deals going to tech companies instead of television networks does not seem absurd.

Sports TV News

NBCUniversal CEO Expects Disney To Buy Company’s Hulu Stake

“Shell noted that live sports coverage is helping make the stake in Hulu a luxury for NBCUniversal.”

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The Walt Disney Company owns 67% of Hulu. The other 33% is owned by NBCUniversal. The latter company doesn’t expect that to be the case forever.

“It’s worth a lot of money,” NBCUniversal CEO Jeff Shell said at an investor conference earlier this week, “and I think there’s no indication that anything else is going to happen than Disney writing us a big check.”

Hulu is primarily a platform for movies and television shows. It is a major part of Disney’s deal with the NHL though. The streaming giant is part of the package of 103 games that are exclusive to ESPN and ABC. Hulu is also a live TV provider for many. The company’s Hulu Plus Live TV package had over 4 million subscribers as of the summer of 2022.

Shell noted that live sports coverage is helping make the stake in Hulu a luxury for NBCUniversal. He credits sports and content migrated from Hulu as the reason Peacock has grown to 18 million paid subscriptions since September.

Deadline reports that if Disney does want to acquire NBCUniversal’s stake in Hulu, “the price could fluctuate but will be in the tens of billions of dollars.”

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Sports TV News

Greg Olsen Believes He and Kevin Burkhardt Can Handles Games ‘On Any Stage’

“Obviously, the bosses get paid a lot to make hard decisions. You have to obviously do what your bosses decide. We’ll cross that bridge when we get there.”

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Greg Olsen

Kevin Burkhardt and Greg Olsen are on tap to call Super Bowl LVII in February, and Olsen told Front Office Sports he has the confidence to announce the game with no hesitations.

“If you’re asking me, I think Kevin and I have shown that we can handle a game on any stage – on any day. We just did it on Thanksgiving. We’ll do it again around Christmas. And obviously throughout the [NFL] Playoffs,” said Olsen. “So whatever decision they make. Obviously, the bosses get paid a lot to make hard decisions. You have to obviously do what your bosses decide. We’ll cross that bridge when we get there.

“But as of now, I anticipate Kevin and I, the two of us, with Erin and Tom down on the sidelines, the four of us, broadcasting the Super Bowl in February in Arizona. Until I’m told otherwise, that’s how we’re proceeding.”

Olsen also told FOS he has negotiated a new contract with FOX Sports, but declined to share details. He is slated to be replaced on the top broadcast crew once Tom Brady ends his playing career. Brady will then begin a 10-year, $375 million contract to serve as the network’s top NFL game analyst and brand ambassador.

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Sports TV News

St. Louis Cardinals Announcer Dan McLaughlin Charged With Third DWI

It is the third time McLaughlin has been charged with DWI. He was charged with the offense twice within 13 months in 2010 and 2011.

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Dan McLaughlin

St. Louis Cardinals television play-by-play announcer Dan McLaughlin has been charged with DWI after being arrested on Sunday in Creve Coeur, Missouri.

According to a report from the St. Louis Post-Dispatch, police received at least two phone calls from concerned drivers that a white BMW was driving erratically, with one caller saying it was driving into oncoming traffic.

It is the third time McLaughlin has been charged with DWI. He was charged with the offense twice within 13 months in 2010 and 2011.

Bally Sports Midwest and the released a joint statement Monday.

“We have been made aware that Dan McLaughlin was arrested on suspicion of driving while intoxicated on Sunday night.. We are very disappointed to hear this, and are working to gather additional information before offering further comment.”

McLaughlin, 48, has served as the voice of the Cardinals for 24 years.

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