A streaming-focused joint venture being developed by the Walt Disney Company, Fox Corporation and Warner Bros Discovery (WBD) might launch later this year without some key sports channels.
When it was announced earlier this year, executives said the forthcoming streaming service — which still has yet to be named — will include sports channels operated by all three brands, including local ABC and Fox stations and affiliates from a subscriber’s home area.
Now, an executive with the largest owner of local broadcast TV stations in the country suggests the service might launch without some Fox and ABC affiliates in certain parts of the country.
Speaking at an investor conference on Tuesday, Nexstar Media Group President and Chief Investor Officer Michael Biard said the streaming service will operate as a mulit-channel video programming distributor, or MVPD, much like a traditional cable or satellite TV company.
To that end, Biard said there will be opportunities for the owners of local TV stations to have their ABC and Fox affiliates distributed through the service, but only if they agree to certain carriage terms negotiated with the three media companies.
“Our Fox affiliates and our ABC affiliates will have the opportunity to opt-in and both be carried and get paid,” Biard affirmed, adding that if the terms resemble distributions agreements on cable and satellite, “then we welcome it.”
The distribution of local Fox and ABC stations on the forthcoming streaming service is critical: Both broadcasters hold the rights to sports programming from the National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), National Hockey League (NHL), NASCAR and others.
Games aired on broadcast TV typically aren’t simulcast on cable networks like Fox Sports 1 or ESPN, though the inverse is sometimes true with respect to certain football and basketball games.
Broadcasters like Nexstar have been aggressive in demanding higher retransmission fees from cable and satellite companies in exchange for the privilege of distributing channels to paying subscribers. Those higher fees have triggered an increase in customer bills over the past few years, pushing subscribers to leave for cheaper streaming options.
Last year, more than 7 million American households ditched the largest cable companies and the country’s two satellite operators — Dish Network and DirecTV — for cheaper streaming options. Around 2 million customers moved over to streaming cable-like alternatives such as YouTube TV and Fubo, according to Leichtman Research.
Some pay TV companies have resisted efforts to raise customer bills by opting to drop certain channels instead of renewing contracts that include fee increases. Programming-related blackouts triggered by these disputes have become more common on Dish, DirecTV and some large cable systems like Charter’s Spectrum TV, leaving subscribers without access to broadcast stations and cable networks for weeks — or, sometimes, months — at a time.
If the sports-centric streaming service operates in the way Biard describes, it could lead to a situation where only certain subscribers have access to their local Fox and ABC affiliates. To that end, it might resemble Dish Network’s Sling TV, which offers Fox and ABC station feeds to subscribers if they live in an area where the network owns the station outright.
That could prove to be the case if broadcasters are successful in their push to reclassify streaming cable-like alternatives as MVPDs under federal law — a movement that is happening now at the Federal Communications Commission, where broadcasters operating under a trade group called the Coalition for Local News are encouraging regulators to do just that. Tech companies and some broadcast networks — including ABC and Fox — have opposed the effort.
The National Association of Broadcasters (NAB), the main lobbying arm of the commercial broadcast and radio industry, has not taken a position on the matter. Instead, it has encouraged the FCC to “refresh the record” on the subject, without committing to a side either way. The NAB counts the networks and independent broadcast station owners among its members.
