ESPN Adds Wild Card Monday Night Games, But Streaming Future Still Up In Air

ESPN announced its first-ever Monday Night Football playoff games, signing a five-year deal with the NFL that begins with a Jan. 17 Wild Card game. The playoff matchups will appear on the cable mothership and Spanish-language ESPN Deportes, as well as streamer ESPN Plus, which will feature “multicast” commentary from the Manning Brothers.

But for all the moderate intrigue of yet another successful NFL dollar extraction from its captive legacy clients through yet another distribution window, many questions remain about ESPN’s future as a bulwark of the basic-cable bundle.

The biggest question is how long ESPN remains wedded to cable as cord-cutting continues to erode its most lucrative entertainment property. ESPN carriage fees yield Disney nearly $10 a month per subscriber, a gold mine four times what any other national network or media company brings in, according to a Kagan analysis.

A true ESPN direct-to-consumer streaming service, beefed up far beyond the tepid and underfed ESPN Plus, would also mark the near final collapse of the bundle, costing cable providers one of their absolute last sources of valuable exclusives. With the cable sector already down to around 70 million U.S. households, how much smaller can it shrink before Disney must move on?

So Disney needs to tread carefully in balancing support for its cable past and streaming future.

There are other questions hovering over ESPN’s future, like the imminent retirements of a cadre of senior executives led by Chairman Bob Iger and Studios Chairman Alan Horn. The clearing of so many old-school giants may give CEO Bob Chapek more operating room without their looming presence, but we still don’t know how Chapek’s new team will affect thinking on this and other issues.

Also in question is how to grow ESPN Online, whatever it may be called in the DTC future. Disney Plus and Hulu semi-successor Star are relying on international expansion to drive future growth.

ESPN Online doesn’t have that option, given the (ahem) modest international appeal of four of the “Worldwide Leader’s” five biggest sports: the NHL, Major League Baseball, college football and basketball leagues such as the SEC and ACC, and even the NFL. Only the NBA has truly global appeal.

That in turn would force a steep subscription fee from those ardent U.S./North American fans to pay for all the pricey TV rights the company has secured in recent years.

ESPN Plus is $4.99 by itself and arguably isn’t worth that, given its many limitations. ESPN Plus subscriber numbers are indubitably boosted by its presence in the three-headed bundle with Disney Plus and Hulu, which are far more popular.

For pricing comparison though, Sinclair is building a streaming service on the footprint and programming of its two-dozen regional sports networks. The nearly-national app reportedly would cost $23 a month, substantially more than any other service in the market, without any of Disney’s mammoth rights commitments. Are there enough fans out there to finance all those pricey deals, whenever ESPN Online becomes inevitable?

Sports gambling represents, appropriately, yet another wild card in this mix. Reports surfaced last month that Disney was seeking a sports book partner willing to put up as much as $3 billion to be attached to ESPN programming. Given the overheated market right now between at least a dozen players trying buy market share, a big gambling rights deal with someone such as FanDuel or DraftKings is certainly possible.

And while Disney downplayed those reports, Chapek has been more positive about gambling’s potential than was Iger, who was always highly protective of Disney’s family-family brand. That may not be an issue for Chapek as he navigates a tricky Tim, particularly if he also decides to spin out ABC and ESPN in a separate unit, as some analysts suggest.

It’s telling the Monday Night playoff deal is for only five years, and that the ESPN announcement promises “more offerings to be announced at a later date.”

In signing $100 billion worth of extended TV rights deals with the Big Four broadcasters, ESPN and Amazon last summer, the NFL already had included provisions to both allow streaming of games and to end the 10-year broadcast and cable deals early, in 2030.

Remaining flexible is probably the best possible approach for Disney too, playing for more time and clarity, as the streaming business rationalizes, cord-cutting progresses, the pandemic eases, and the economy recovers. But decisions can’t be put off forever, even as ESPN keeps signing new rights deals.