It’s been about a week since Disney, Warner Bros. Discovery and Fox announced a new joint venture to offer live sports outside the traditional cable bundle, and pay TV distributors are still trying to figure out just how disruptive the new service will be.
The key question for distributors such as Comcast, Charter and DirecTV is whether they’ll be allowed to offer the same skinny bundle of linear networks that Disney, Warner Bros. Discovery and Fox announced will be available to consumers later this fall. That bundle includes ABC, ESPN, ESPN2, TNT, TBS, Fox, FS1, FS2, and a handful of other cable channels that showcase sports.
If Disney, Warner Bros. Discovery and Fox allow distributors to offer the same product, in addition to the standard cable bundle, there’s likely to be minimal consternation about the joint venture. But, CNBC reports it’s not clear that will be the case, given that may defeat the purpose of its existence.
That’s why, logically, the new sports joint venture only makes sense if the three media companies bar distributors from offering the same product.
Privately leaders at Disney, Warner Bros. Discovery and Fox have begun to hear complaints from some distributors, who are concerned the new skinny bundle will lead to increased cable TV cancellations, according to people familiar with the matter.
If the sports joint venture refuses to allow distributors the same terms as it’s offering retail customers, distributors could either refuse to carry their networks when carriage renewal deals are up or even sue, according to Craig Moffett, an analyst at MoffettNathanson.
Disney, Warner Bros. Discovery and Fox all rely on the pay-TV distributors for the bulk of their revenue.
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