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ESPN+ To Take On Foxtel’s Sport Dominance When Rights Become Available

Nine Entertainment is making a strong pitch to retain Disney content following the launch of the new Disney + Content, at the same time Disney is looking to turn ESPN into a global sports channel that could well pitch for the Australia rights to cricket, motorsport and rugby when those rights become available.

At the Disney + presentation in the USA recently attendees were told that Australia is a key market and that 2/3rds of the long term subscriber mix will be International.

It was also revealed that in 2020 Disney is set to invest US$1 Billion in original content with this rising to $2B in 2024.

According to Disney executives Disney + will not be profitable till 2024 with peak operating losses occurring between 2020 and 2022.

In a move that could hurt Foxtel ESPN + is looking to lift subscribers from 2M today to between 8-12M by 2024. Executives have told ChannelNews that Australia is a key International market when it comes to growing ESPN+ subscribers due to “Australia’s passion for sport”.

According to one Australian executive who was at the launch event for Disney + which is set to go live in November 2019, “Cricket and Rugby Union”.

are Australian sports that could be target for the ESPN+ channel “because of their International appeal in markets such as the UK and India.

ChannelNews understands that ESPN+ would like to pitch to get the global rights to the English Premier League, when they become available. They believe that they would get a return on investment by expanding sales of subscriptions in International markets such as Australia.

This week it was revealed that after losing the English Premier League rights in 2016, Foxtel have now further distanced themselves from the competition deciding to pull the plug on all of their EPL club channels.

Foxtel confirmed their decision to discontinue the channels from late May as they look to focus on other competitions.

ESPN+ is expected to deliver an operating loss of US$650M in FY 2020 and be profitable in 2023.

Disney is also looking to grow online streaming service Hula from 25M paid subscribers today to 40-60M subscribers by 2024.

Currently Hula is unprofitable and is expecting a US$1.5B loss in 2019, it’s expected that this will be turned around by 2023to 2024.

In Australia both Stan who have the rights to Disney and Foxtel are set to face tough competition from Disney+ when it launches.

This is on the minds of News Corp executives who own the lion’s share of Foxtel and are now facing having to refinance Foxtel who have a dominant position in the sports content market.

News Corp who now see themselves as a services Company is expected to inject $500 million into Foxtel as part of a $2.5 billion refinancing package.

The equity injection is one of a number of options being canvassed by News Corp, which controls Foxtel finances from its global headquarters in New York.

Other options being considered include News Corp lending money directly from its own balance sheet to Foxtel.

The AFR said that Foxtel refinancing is being run by News Corp’s global chief financial officer, Susan Panuccio.

Foxtel was consolidated into News Corp’s financial accounts following the completion of the merger of Foxtel and Fox Sports in mid-2018, which changed Foxtel’s ownership structure.

News Corp now owns 65 per cent of Foxtel, while Telstra owns 35 per cent. Previously News Corp and Telstra owned Foxtel 50-50 and Fox Sports was wholly-owned by News Corp.

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