With the launch of the ESPN direct-to-consumer service and app enhancements expected to take place this fall, there has been considerable interest and speculation into what the platforms could entail. Jimmy Pitaro, the chairman of ESPN, has discussed how the company is taking “parallel paths” with the new functionality and how ESPN networks are going to continue remaining available on cable television. Furthermore, he has talked about how the company ultimately wants users to authenticate their viewing credentials through the ESPN App to utilize these new experiences, some of which include integrations related to betting, fantasy and commerce.
Pitaro was part of a recent discussion from the CAA World Congress of Sports alongside Bob Iger, the chief executive officer of The Walt Disney Company, where both executives confirmed that a launch date, price and name have all been determined. The only details surrounding these factors were that the service would not be called “Flagship,” which was the internal codename assigned to the project at the time. Iger referred to the launch of the direct-to-consumer product as something that “might be the biggest move since getting the full season of the NFL,” and Pitaro took a similar sentiment in saying it is “probably the biggest transition in our history.”
The most recent earnings report from The Walt Disney Company projected a 13% rise in operating income within the sports division amid the ongoing fiscal year. ESPN as a whole generated revenue of $4.8 billion and operating income of $228 million for the quarter, the latter of which is indicative of a 15% rise from the previous year. While speaking at the event this week, Iger spoke about the importance of sports within the overall business of The Walt Disney Company and the reasons why sports properties have continued working with ESPN.
“I know how important exposure, distribution and access to consumers is, and that doesn’t come cheaply, and it doesn’t come easily,” Iger said per Sports Business Journal. “It’s not always about if you build it, they will come.
“You have to build it, and you have to figure out a means of delivering it to consumers that are both very pro-consumer and pro-sports, meaning the organization, and obviously pro the business that is covering those sports. And I think we offer – in part because of the range of product that we offer – the resources that we have, because we are a company that is on very solid footing from an economic perspective, the energy that we create just in terms of our support of and our excitement about being in the entertainment/sports business.”
Two years ago, The Walt Disney Company engaged in a strategic reorganization that created three business segments within the company – Disney Entertainment, ESPN and Disney Parks, Experiences and Products. Since that time, ESPN has made internal changes to some of its leadership, including the promotion of Burke Magnus to president of content and return of Rosalyn Durant as the executive vice president of programming and acquisitions. ESPN has also reached new media rights deals with entities such as the NBA, NCAA and College Football Playoff, and it has also leveraged technology and innovation to continue serving sports fans.
“Technology is a sports fan’s heaven in many respects,” Iger said. “We’re now entering a new age where the technology side of our business has actually risen to a level that is almost equal to the entertainment side – but probably an unbelievable partner to entertainment – more so than ever before. And to me, that’s very exciting.
“And also, the ability to package, which we’ve done with our entertainment offerings with our sports offerings, whether we were dealing with multichannel operators or whether we’re dealing with consumers that want to buy streaming services, I think has real value both for us as distributors and also for consumers.”
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