TradeEdge-NFL, NBA caught by surprise on mega sports streaming service announcement

At least two major sports leagues – the NFL and TradeEdgeNBA − were caught by surprise Tuesday when three major television companies announced they were joining to put their sports content on a single new streaming service to be launched this fall, people familiar with the situation told USA TODAY Sports Wednesday.

The people didn’t want to be identified because of the sensitivity of the situation.

The new streaming app would be jointly owned by the three companies – ESPN, Fox and Warner Bros. Discovery – and would include games from all major American pro sports leagues, including the NFL and NBA.

Those media companies bought the rights from those leagues to televise their games, but jointly putting those games on a streaming service raises some possible tension with those sports leagues as business partners, sports business experts told USA TODAY Sports.

What could be points of concern?

For example: While the NFL has pursued streaming deals for its games, the league loves linear cable, satellite and broadcast television because it delivers the big audiences that drive its revenue.

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“One of the secrets of our success is that we’re really committed to broadcast television,” NFL commissioner Roger Goodell said this week from the Super Bowl site in Las Vegas. “ As I’ve said 90 percent of our games are on broadcast and free over-the-air television. I think it is the reason you’ll see over 200 million people watch this game here in the United States and on the broadest possible platform.”

By creating an app that makes its games available to watch on an online app, the three media companies could be accelerating the demise of linear TV and the revenue that comes from it as more linear TV subscribers cut the cable cord and migrate to this new app. It’s part of a vexing problem facing media companies as viewers ditch linear TV for streaming, where content can be more difficult to monetize.

Other possible issues

A joint venture like this also raises questions about whether it would reduce competition in the bidding for the future streaming rights of these leagues while giving big market clout to this one new sports mega app.

A person with one of the three companies told USA TODAY Sports that those companies will negotiate and acquire their sports rights separately. The person wasn’t authorized to speak publicly and didn’t want to be identified.

“I would imagine even if the leagues weren’t caught off guard that they would be concerned about how the evolving media landscape changes the equation as to who has the leverage,” said David Carter, sports business professor at the University of Southern California.

What's included and what did others say?

The joint venture would be offered directly to consumers and will include ESPN+, plus access to 14 linear networks: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, Big Ten Network, TNT, TBS and truTV. What you get on those channels would be available on this app. That would include a lot of big games from the NFL, Major League Baseball, the NBA, WNBA, NHL, NCAA basketball tournament games and the PGA Tour, among others.

The NFL, NBA, Major League Baseball and NHL declined to answer additional questions on the record Wednesday or didn’t respond to questions about whether they knew about it in advance or had concerns about it. The NFL issued a statement:

"We're aware of yesterday's announcement and are still gathering details to understand this proposed new streaming service," the statement said.

The NBA also issued a statement:

“While we look forward to learning more about this new venture, we’re encouraged by the opportunity to make premier sports content more accessible to fans who are not subscribers to the traditional cable or satellite bundle,” the statement said.

The NCAA didn’t answer questions about it either except to say, “Generally, the NCAA believes the new service provides more options for viewers to access our championships.”

Former CBS Sports president Neil Pilson raised this issue Tuesday in an interview with USA TODAY Sports.

“My first initial thought is if this is all OK with the NFL and the NBA and all of the premier sports that are currently on these channels,” PIlson said. “Are they on board? Do they need to be consulted and included? I don’t know the answer to that. I’m sure someone’s thought of it.”

The companies declined additional comment.

Contributing: Jeff Zillgitt

Follow reporter Brent Schrotenboer @Schrotenboer. Email: [email protected]