A forthcoming sports-focused streaming service being developed by Fox Corporation, Warner Bros Discovery (WBD) and the Walt Disney Company’s ESPN has drawn criticism from a number of pay television providers, but at least one major television broadcast group has signaled their support for the idea.
On Wednesday, officials at Gray Television said they were willing to embrace a low-cost television service that offers sports-focused channels like ESPN, Fox Sports 1 if it also delivers streaming versions of local Fox and ABC affiliate signals, saying it could be “a significant opportunity to expand the pay TV ecosystem.”
“Local affiliated stations not only carry nationally televised sports but also provide local sports coverage, local news and weather, local jobs and extensive community service,” officials at Gray Television said in a statement emailed to The Desk. “We believe that including ABC and Fox stations in a new virtual multichannel video programming service could offer benefits to viewers, their local communities, and local broadcasters.”
Gray Television is one of the largest independent operators of broadcast TV stations in the country, with around 180 major-network affiliates under its direct ownership or control. Around one-third of its stations provide ABC or Fox programming under a primary or secondary affiliation agreement.
Officials at Gray said the forthcoming streaming service could prove to be mutually beneficial if it scales to the point that Fox and Disney are able to invest more in securing lucrative sports telecast rights for broadcast stations. Currently, Fox and Disney distribute National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA) and National Hockey League (NHL) games through their channels, locking down rights to the four most-popular sports franchises in the United States.
Gray’s apparent embrace of the plan comes amid strong criticism from pay television groups, who suggest the forthcoming streaming service could allow some of the broadcast industry’s biggest sports rights holders to further concentrate their market power in a way that would be unfavorable to cable and satellite subscribers.
The groups also complain that the planned streaming service unfairly allows Fox, Disney and WBD to offer channels with sports programming on an à la carte basis, something that cable and satellite companies have wanted to do for a while but were prevented from delivering because of agreements with broadcasters that mostly require distributors to offer non-sports channels in programming packages.
“The ‘house of cards’ in the video marketplace continues to wobble,” Grant Spellmeyer, the CEO of ACA Connects, which represents small and rural-area cable TV operators, said in a statement on Wednesday. “Allowing the biggest media players to join forces — while locking out traditional linear cable providers from offering the same package at the same price — only gives even more power and leverage to the Goliaths to extract more money from customers of ACA Connects members…with customers facing higher prices and fewer affordable choices, there needs to be a level playing field”
For years, streaming services were largely seen as the product that offered customers more choices beyond the traditional cable and satellite bundle. As broadband platforms matured, services like Sling TV, DirecTV Stream and Fubo launched to offer streaming access to broadcast and cable channels on devices beyond the television set.
Over time, cable and satellite-like programming agreements have been forced on streaming services like Fubo, which are required to carry non-sports channels like lifestyle and news networks in order to offer sports-inclusive channels on their services — agreements that have driven up the cost of those services over time.
This week, a spokesperson for Fubo said consumers generally like the idea of accessing entertainment, news and sports programming from a single service. The spokesperson claimed — without evidence — that sports-focused streaming joint ventures “rarely work,” suggesting Fubo was the better place for customers to spend their money.
Despite the posturing, the rest of Fubo’s statement revealed the company is threatened by the prospect of a sports streaming service developed by its broadcast partners — and they’re hoping all cable, satellite and streaming subscribers will be equally worried.
“Every consumer in America should be concerned about the intent behind this joint venture and its impact on fair market competition,” the Fubo spokesperson said. “This joint venture spotlights a concerning trend where an alliance with significant market share, reportedly controlling 60 to 85 percent of all sports content, could dictate market terms in a manner that may not serve the broader interests of consumers.”
Fubo’s business has already been affected by the news, with the company’s stock price plummeting 11 percent in pre-market trading hours after news reports of the venture first surfaced.
