Will Sports Hulu Work? Here’s What We Know.
If something works once, we should try it again, right?
That’s the thought process that highly paid corporate CEOs are employing as they bet on a daring new venture.
The idea is a kind of Hulu for sports, an agreement between three competitors to work together toward a common goal.


Photo: Pexel.com
Will Sports Hulu work? Here’s what we know.
About Sports Hulu
I’ve written the least about this announcement of all the bombshells from last week.
The hesitation stems from my due diligence in trying to learn everything I can about this venture since it’s so…unlikely.
I’m not alone, either. According to the Wall Street Journal, none of the sports leagues knew this deal was happening.


(AP Photo/Matt Dunham, file)
People like Roger Goodell, Rob Manfred, and Adam Silver learned about it at the same time as the rest of us.
At this point, only about 20 people on this planet enjoy a strong understanding of what this project will be.
So, let’s quickly filter through the knowns and draw some conclusions from there.


Photo: Disney
The first known fact is that Disney, Fox, and Warner Bros. Discovery are creating a kind of skinny bundle.
That’s industry jargon for the streaming version of cable television.


Photo: Disney
You subscribe to a bunch of channels, except you stream them rather than watch them via a cable service.
Those of you who have tried Fubo, Sling TV, or YouTube TV subscribed to skinny bundles, whether you realized it or not.



Photo:cnet.com
Disney already offers a skinny bundle called Hulu + Live TV, which somehow nets $92 per customer despite Disney charging only $89.99 per month.
Given those two numbers alone, you understand why Disney (and Fox and WBD) would like the idea of the skinny bundle. It’s profitable.


Photo: ESPN
So, all three companies have agreed to create one where they share content like the ESPN channels, FS1 and FS2, the Big Ten Network, and the SEC Network.
In other words, this unnamed service will offer more than half the sports currently broadcast on cable television.
Why This Deal and Why Now?


Photo: ESPN
Let’s be blunt. Sports Hulu is a death sentence for cable carriers.
Three of their biggest customers just joined together to create a competitor.
There’s a causality for this. Remember when Charter cut off Disney’s cable channels on the opening day of the college football season?


Photo: CNBC
That was an act of aggression that provoked multiple responses from Disney.
Ultimately, Charter ceded the battle…and at great cost. Its most recent earnings report acknowledged the tactic had failed.
Charter actually had to mention in its corporate failing that the Disney squabble had cost it tens of millions of dollars.


charter spectrum
Still, Disney wants insurance against something similar happening each time a cable company renegotiates carriage fees.
So, Disney is building its own thing, along with two of its largest competitors.
That sounds familiar to many of us, as it’s the original business model for Hulu.



Photo:cnet.com
Disney joined Fox and NBCUniversal in creating the venture, which only recently became exclusive to one of them.
Hulu worked as a joint effort for more than a decade. If not for the pandemic, it still might.
So, executives from the three companies came together and built a similar solution for a different problem, the escalating cost of sports rights.


Photo: D23
Thus far, all indications are that each company will bid for its own sports rights rather than the trio working as a group.
Should that change, we’ve probably got collusion issues to discuss. For now, it’s fine, though.
The High Cost of Sports Streaming


Photo: skillastics.com
Meanwhile, all three companies will pay themselves carriage fees for their channels on this service.
To do that, they’re gonna charge a pretty penny.
Analysts have projected monthly costs of $40-$60 for this Sports Hulu service.


Photo: THIERRY CHESNOT/GETTY IMAGES
Even if Sports Hulu offers a discounted annual fee, we’re still likely discussing a cost similar to NFL Sunday Ticket’s $349.
Will people pay that much? More specifically, will enough people pay that to justify the joint venture?
That’s a TBD, but I cannot dismiss it since Hulu did something similar on a smaller scale many years ago.


Photo: English Jargon
For the first time ever, networks asked customers to pay for free television, and they did.
Disney believes the same thing is possible with a sports-based skinny bundle.
In the process, Sports Hulu threatens every other skinny bundle, including Disney’s Hulu + Live TV.


Photo: Deadline
Then, we have the second sticking point. Disney plans to launch an ESPN over-the-top streaming service in 2025.
Doesn’t Sports Hulu provide many of the same benefits to a subscriber? So, why would we want the ESPN standalone service?
We wouldn’t get content like the Big Ten Network with it.


Photo: Disney
That’s a key sticking point to gullible Ohio State fans who are convinced next year is their year. Spoiler: It’s not.
The Sports Hulu concept feels like a stopgap measure as Disney gets its ducks in a row for ESPN’s launch.
Then again, the release date of later in 2024 indicates that Sports Hulu will have nearly a year to succeed on its own.
Should this concept work, would Disney reconsider the need for the ESPN app?
I doubt that as Iger and his team sound quite committed to a full-throated version of ESPN as a streaming service.
Still, convincing customers why that product is better than the current ESPN+ app will be…challenging.
What Would Cause Sports Hulu to Fail?


Photo: NFL
Take your pick of ego, greed, lost licensing agreements, lack of content, interference from sports leagues, or the aforementioned pricing.
I’m optimistic about this idea, as I’m a big fan of those instances when competitors realize they make better allies.
Even as an optimist, I can count dozens of reasons – literally – why this won’t work versus only a handful for why it will.


Photo: Deadline
I mean, Comcast and Disney wound up squabbling for five years over the proper valuation of Hulu…and still couldn’t agree.
The two corporations left the decision in the hands of arbitrators because they’d reached an impasse.
That knowledge must stick in the minds of Disney executives, but it also applies to those at WBD and Fox. They read the stories, too.


Photo: D23
Then, we have the Hulu factor that’s barely even being discussed except for here.
Many of Hulu’s programs would be available on this app. So, it’s theoretically a competitive threat, and that’s just Hulu, not Hulu + Live TV.
Still, there is one reason why I’m confident that Sports Hulu could work. It already exists in a way.


Foxtel
Disney and Fox have created a similar setup with Foxtel in Australia. Yes, we DO have proof of concept.
Still, there are a lot of ways this can go wrong.
That’s why as-yet unannounced details will go a long way in determining whether Sports Hulu works.


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Feature Photo: Getty Images/Ringer illustration