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As cord-cutting grows, ESPN says streaming service will launch in 2025

Sean Farnham and Dave Pasch broadcast the Gonzaga-Saint Mary’s game for ESPN on Jan. 14, 2017, from the McCarthey Athletic Center. Disney CEO Bob Iger announced Wednesday that ESPN will be available as an a la carte streaming product in 2025.  (Dan Pelle / The Spokesman-Review)
By Ben Strauss Washington Post

Disney CEO Bob Iger announced Wednesday that ESPN will be available as an a la carte streaming product in 2025, ending years of speculation of when cord-cutters would be able to watch the leading sports network.

If the timeline holds, sports fans without cable for the first time will have access in less than two years to ESPN’s highest-profile events like the College Football Playoff and the NBA Finals.

Iger’s announcement, which confirms reports that have swirled for months, comes as Disney charts a course through the rapidly transforming media landscape, including how to handle ESPN, which has long been a huge economic engine for the company but faces headwinds as consumers leave the cable bundle.

A decade ago, ESPN was in some 100 million homes, but that number has shrunk to around 70 million today. On a recent episode of the podcast Pablo Torre Finds Out, former ESPN president John Skipper said that at the peak of the cable bundle, the sports network was more profitable than the parks and entertainment divisions of Disney combined.

In recent months, Iger has announced Disney’s intention to seek partners for ESPN, either through an equity investment with a league partner, like the NBA or NFL, or through a strategic deal to help with marketing or distribution, with a company like Verizon, Apple or Amazon.

A league, in theory, could receive an equity investment in the company in exchange for new forms of content, like behind-the-scenes footage. ESPN would also like the leagues to be invested in the success of their streaming future. Another company might partner with ESPN on marketing or technical capabilities to better distribute ESPN’s streaming platform and get it in front of more sports fans.

On Wednesday, Disney also released its first earnings report that broke out ESPN’s financials separately from the rest of the company. According to the filings, the network had an operating profit in the most recent quarter that grew 16% from a year ago, up to $987 million. Revenue were up 1%, to $3.455 billion. The company did not renew its Big Ten football rights, which played a key role in the figures. (The company did not release specific figures for the previous two fiscal years, but Iger said ESPN increased its profits in each of them.)

Iger, on an earnings call with investors, touted ESPN’s increased viewership this fiscal year despite its decreasing reach and its ability to be a hub for sports fans in the streaming ecosystem, potentially being a player in local rights, too. He cited ESPN’s strength on TikTok, which speaks to ESPN’s cachet with a younger generation of sports fans.

“ESPN is the No. 1 brand on TikTok with about 44 million followers, which is an incredible statistic,” Iger said. “We feel leaning into it is the smart thing to do because of its unique quality, how popular it is, and how profitable it’s been.”