How ESPN+ Is Bulking Up for the Streaming Future

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What NHL and NFL Deals Mean for ESPN’s Streaming Future

ESPN+ is quickly becoming a must-have

ESPN may not want to admit it just yet, but the sports giant’s future increasingly looks like it will be dominated by what is streaming on ESPN+ rather than what the dwindling subscribers to the cable-TV bundle can watch on ESPN.

This month alone, ESPN has secured more NHL and, for the first time, NFL games for its three-year-old streaming service. ESPN’s deal with the NHL, which puts the hockey league back on ESPN airwaves for the first time since 2004, greatly increases ESPN+’s foothold in the sport, which has previously been reduced to providing daily out-of-market local TV games. Starting next season, ESPN+ will stream 75 games exclusively, along with fellow Disney-owned streaming service Hulu, as well as simulcast ABC’s coverage of the Stanley Cup Finals.

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ESPN’s new NFL deal, announced last week, makes the network’s most-popular programming, “Monday Night Football,” finally available for the 12 million-plus ESPN+ subscribers, as well as one exclusive game each season. The deal also includes the option for ESPN+ to be part of ABC’s two Super Bowl broadcasts in 2026 and 2030.

ESPN might not be done either. During a media call last week to discuss its NFL deal, ESPN boss Jimmy Pitaro expressed interest in acquiring the league’s out-of-market Sunday NFL Ticket package when it becomes available after the 2022 season. DirecTV, which has held exclusive rights to the TV and streaming package that offers every Sunday afternoon NFL game to customers since 1994, is widely expected not to renew its deal.

During an earlier media conference to discuss its new NHL deal, TheWrap asked Pitaro if streaming will eventually usurp the ESPN TV network, which has long been a cash cow for Disney. Our reasoning? The NHL deal includes 75 exclusive games on streaming each season, three times as many as the 25 games that will air on ESPN and ABC (though the biggest events like the All-Star Game and Stanley Cup playoffs will still be on linear TV).

“I would say this deal is actually a reinforcement of our continued commitment to our core linear networks. If you look at the regular season games that will be made available exclusively across our video networks…if you look at the fact that we’re gonna be sharing the postseason  — we’re gonna have four out of the seven Stanley Cup Finals,” Pitaro said. “At the same time, yes, streaming is at the heart of this deal. And this is a reflection of its role as a critical part of our future.”

ESPN+ launched in 2018 to little fanfare, offering a smattering of exclusive shows like Peyton Manning’s “Peyton’s Places” and live games from the MLB, MLS, international soccer and college football and basketball from the Big 12 and more than a dozen mid-major conferences like the Sun Belt and Ivy League. Shortly after launch, ESPN+ became the UFC’s main broadcast partner and took over distribution of the mix-martial arts’ pay-per-view matches.

“We’ve had exploratory conversations with the league. Sunday Ticket is an incredibly valuable product. It’s interesting to us,” Pitaro said. “When the league is ready, we’re interested in having that conversation with them.”

Were ESPN+ to gain Sunday Ticket, it would make the streaming service the main hub for NHL and NFL fans, along with UFC.

The UFC lightweight championship in 2018 (Ed Mulholland/Getty Images)

Despite live sports’ increasing importance to the pay-TV ecosystem, consumers have dropped their TV subscriptions in rapid numbers over the past few years. The subscriber count now hovers around 80 million homes (it was more than 100 million just six years ago). Most industry analysts hope it stabilizes somewhere around 50-60 million homes. But it’s clear that linear TV is bleeding viewers.

According to Nielsen’s latest Total Audience Report on Thursday, viewers over 18 are watching an average of 15 minutes fewer of live or time-shifted television, while time spent on an internet-connected TV device (i.e., streaming platforms like Roku) or watching video on a computer increased by that same amount. Broken down by age group, it looks even worse. The age groups that saw the biggest drop in time spent watching linear TV (each fell by more than 20 minutes), were adults between 18 and 34 and adults between 35 and 49. Basically, the most important audience for advertisers.

After hitting the market in April 2018, ESPN+ gained 1 million subs within its first four months. Disney’s decision to bundle ESPN+ with Hulu and Disney+ for a discounted rate has proven to be smart: Its subscriber count more than doubled to 7.6 million by last February, and as of Jan. 2, 2021 has more than 12 million subscribers.

That puts ESPN+ on par with Paramount+, which along with Showtime OTT has 19.2 million subscribers collectively.

ESPN is not the only one building up for the streaming future: Last week’s NFL deals (which don’t kick in until 2023) will also put “Sunday Night Football” on NBCUniversal’s Peacock and hand over the keys for “Thursday Night Football” to Amazon. Paramount+ will continue to stream games that air on CBS.

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