Disney Extends Major League Baseball TV Rights to ESPN+ as Streaming Momentum Slows

ESPN+, Disney’s smallest streaming service, will get a big live sports boost in the coming months. A substantial seven-year deal with Major League Baseball will bring 30 exclusive regular-season games to ESPN, including 25 Sunday Night Baseball telecast and the MLB Little League Classic, along with five additional games every season that include the national Opening Night telecast, the company said today during its quarterly earnings call. The deal, which will extend through 2029, will allow Disney to simulcast all ESPN and ABC game telecasts on ESPN+, giving company the latitude to promote both its legacy linear television business and its increasingly crucial direct-to-consumer streaming business. Disney has also struck an eight-year deal with LaLiga that will make ESPN+ the new streaming home of the Spanish soccer league in the U.S. beginning in August. All 380 LaLiga Santander matches, as well as select additional matches, will come to ESPN+ annually for the next eight years in both English and Spanish, the company said today. And Disney is eyeing the rights to additional live sports offerings, including NFL Sunday Ticket, to bulk up both its linear and streaming outposts. The deals are just the latest big rights deals to favor streaming services and speak to Disney’s broad strategy of looking for ways to pad out the programming not just on its legacy TV business but its broadening streaming offerings. In just the past six months, the company has struck new rights deals with the NHL, the SEC and the NFL, all of which will bring additional matches and streaming options to ESPN+ and Hulu. NHL, Disney Strike 7-Year Hockey Rights Deal for Linear and Streaming Platforms It also comes as Disney+, which cleared 100 million subscribers in March after just 16 months on the market, is seeing a slight slowdown in growth. The streamer reached 103.6 million subscribers by the beginning of April, but saw its growth rate tick down slightly compared to its previous breakneck quarters. Streamers Hulu and ESPN+ reached 41.6 million and 13.8 million subscribers in the quarter, respectively. Altogether, Disney’s direct-to-consumer business, including Disney+, Hulu and ESPN+, brought in nearly $4 billion in revenue in the quarter, a 59% increase from a year ago. (Meanwhile, the company’s linear networks brought in $6.7 billion in revenue mainly from its domestic channels—a 4% decrease from a year prior.) Bulking up the bundle In the U.S., Disney sees that investment in ESPN+ as a way to continue bulking up its Disney+ bundle, which offers access to all three streamers for a single price and represents the company’s biggest growth engine, Disney CEO Bob Chapek told investors Thursday. “One thing that continues to impress us is the opportunity to have the bundle in the U.S. be even larger,” Chapek said. “All of the metrics that we see, all of the performance factors, are extremely positive for that.” That focus on the bundle—in addition to growing the company’s content slate, pushing into international markets under its new Star brand and continuing to expand streamers like Disney+ into additional markets like Malaysia and Thailand—are cornerstones of Disney executives’ bullishness on its previously stated goal of reaching between 230 million and 260 million subscribers by the end of the 2024 fiscal year. On the content side, Disney had several wins in the quarter, including Hulu’s fourth season premiere of The Handmaid’s Tale, which after being released one day early drove the biggest audience ever for a Hulu Original series. Disney is also on track to release the latest original series on Disney+, the Marvel original series Loki, which will be released on Wednesday nights beginning June 9 instead of the streamer’s previous Friday programming drops. Ready to ramp up subscriber growth Disney has already announced its considerable investment in original programming to help drive growth on Disney+ and its other streaming properties. A continued ramp-up in production, previously hamstrung by Covid-19 production pauses and delays, will help its streamers—and its linear business—offer a more regular cadence of original programming to entice new subscribers. “Looking at our entire portfolio of streaming services, we expect that as full production levels resume and we get to a more normalized cycle, the increased output will help fuel additional sub growth across Disney+, ESPN+, Hulu and Hotstar,” Chapek said. That growth has proven complicated in some international markets, where Covid-19 has once again reared its head. As the virus bears down on India, the suspension of the Indian Premier League cricket matches, which serves as a cornerstone to Disney’s Hotstar streamer, dampened subscriber results. Disney has also opted to punt the launch of its all-purpose Star streamer in Latin America to the fourth quarter so it can capitalize on having additional programming. In the U.S., Chapek says the company has adopted a three-pronged approach to evaluating how to manage new theatrical releases with the continued reality of Covid-19. As some consumers remain uncomfortable about the prospect of returning to theaters, Disney said today that it would send the Dwayne “The Rock” Johnson and Emily Blunt-led action film Jungle Cruise simultaneously to theaters and to Disney+ as a Premier Access title at the end of July, joining other titles like Cruella and Black Widow. But the company is betting that the market will take a turn for the better by late summer and is dialing back its theatrical releases on streaming. On August 13, Disney will send Free Guy to theaters for an exclusive 45-day theatrical window; in September, the next Marvel film Shang-Chi and the Legend of the Ten Rings will make its own theater-exclusive premiere. Disney will hold its upfront presentation for marketers next Tuesday.