ESPN executives discussed with Boardroom the future of the leading sports network with the current linear cable model no longer sustainable, including next fall’s DTC product launch.
Temperatures were already soaring into the 80s in the early morning hours of the last Wednesday in August as an unmarked black shuttle bus pulled into ESPN’s rural Connecticut campus. Dozens of journalists came pouring out as part of the network’s first media day since 2018, an opportunity for the brand to update and inform folks about its vision for the future.
ESPN brought out its top executives and talent in Bristol, including chairman Jimmy Pitaro and other C-suite brass, Stephen A. Smith, Pat McAfee, Nick Saban, Mike Greenberg, Elle Duncan, and more. The network is in a race against time and prevailing trends, with irreversible losses of subscribers and revenue in the streaming era as fewer young people watch traditional linear TV.
Kicking the can down the road is no longer an option. A multi-billion dollar industry firmly entrenched for decades is undergoing foundational, transformational, irreversible change. ESPN has long been labeled the “Worldwide Leader” in sports — a moniker Pitaro said he actually dislikes — but innovations have lagged. After years of talking about impending changes, the day’s events proved that the future is now.
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That plan centers around its long-discussed and long-awaited direct-to-consumer platform launching next fall that Pitaro dubbed Flagship, a placeholder he said wouldn’t be the actual name. The network’s been experimenting with DTC for more than six years, with its ESPN+ platform that offers its linear networks, thousands of other leagues and events from around the world, and original shoulder content. ESPN wanted to make sure the technology was fine-tuned and up to par over several years, and now the network is ready for its huge Flagship rollout next fall, likely in the $25-30 range per month.
“This is a top priority for ESPN. It’s a top priority for the Walt Disney Company,” Pitaro told reporters. “[Disney CEO] Bob [Iger] has repeatedly said that one of his core priorities at Disney is to continue the evolution of ESPN as the preeminent digital sports destination. We need to be everywhere.”
Like any profit-driven company, ESPN and Disney need to go where the revenue is. That includes providing consumers with optionality, including DTC, linear, and skinnier bundles like Venu, the sports streaming joint venture with Fox and Warner Bros. Discovery on indefinite hold following last month’s preliminary injunction due to an antitrust lawsuit filed by streaming competitor Fubo. ESPN filed an appeal to that ruling, with a trial scheduled for October 2025.
While subscriber growth for ESPN+ has leveled off, down to 24.9 million in Q3 2024 from a high of 26 million in Q4 2023, Disney’s DTC trio of Disney+, Hulu, and ESPN+ turned a profit for the first time last quarter, led by ESPN+’s $66 million surplus.
ESPN celebrated its 45th anniversary earlier this month, and Pitaro credited the network’s success thanks in large part to its unparalleled rights packages. He specifically mentioned disciplined renewals on good financial terms with the NBA and College Football Playoff, along with deals including the entire SEC, an NFL contract that includes Super Bowls, the NHL, college sports, and women’s sports.
While Flagship will include the linear and college networks and ESPN+, Pitaro also acknowledged that ESPN can’t just unveil Flagship as a replica or a facsimile of the current offering. For something Disney’s been hyping for years as the future, there needs to be a serious value add.
“We know that this can’t be as simple as just flipping the switch,” Pitaro said. “It can’t just be, ‘Hey, we’re here.’ We know our product needs to be enhanced. It’s an understatement to say that we have all hands on deck right now. You’re going to see massive improvements.”
The Future of Younger Audiences
It’s no secret that Gen-Z viewing habits are diametrically opposed to the longstanding linear cable model. For fans under 35, per Comscore, 68% of their sports content comes from social media, streaming, and digital. For youth 13-24, 68% of their consumption is digital versus 38% on linear TV.
“I have a 17-year-old who’s a freshman in college,” Tina Thornton, ESPN’s Executive Vice President of Creative Studio and Marketing, told Boardroom. “My husband bought a TV to put in the dorm room and she refused it because she watches everything here,” pointing to her phone.
Pitaro said something that keeps him up at night is reaching younger audiences on daytime programming. Yet, led by shows like McAfee’s, ratings for studio shows are growing, and the company is investing more in daytime shows. But what ESPN hopes will keep it ahead of the game in terms of getting Gen-Z and Alpha on board is making bespoke content and catering it to where and how it’s consumed.
It’s why throughout ESPN’s dog and pony show last month, they kept hitting on integrating fantasy and betting content into their apps and programming, unveiled a “Where to Watch” function across its digital platforms informing users on where to watch their favorite team inside and outside ESPN, and touted the strides they’ve made in social and digital.
Next fall, just in time for football season, Pitaro promised deep connective tissue between its video and fantasy sports programming and video with ESPN Bet, which is operated by Penn Entertainment, with eight new physical retail locations and a recent entry into the New York market. The company found that 52% of avid ESPN users are very likely to make ESPN Bet their top sportsbook.
If you choose to link your ESPN accounts to fantasy and betting, you’ll be able to view your fantasy team or ESPN betting slips on the main app home screen along with live odds. Exclusive bet offerings will be sent to the ESPN and fantasy apps should those be linked, and linear and digital shows, including a new PGA Bet Cast, will continue to be integrated. But the most growth ESPN will see in its betting division will be casual, not avid, fans.
“There’s still a significant pool of potential betters,” Flora Kelly, ESPN’s vice president of brand strategy and content research, told Boardroom. “And when we talk to them, what’s really going to drive them is the entertainment aspect.”
Entertainment is also the name of the game on ESPN’s social channels. ESPN’s digital and social channels reach 67% of the US adult population and 82% of adults between the ages of 18 and 49, according to Comscore. And despite the Olympics living on NBCUniversal channels, July marked 37 consecutive months with ESPN as the most engaged social brand in sports, something the network took great pride in.
ESPN has the most TikTok followers, 47.5 million, of any global network inside and outside sports. ESPN, ESPN NBA, SportsCenter, and ESPN FC are four of the top 30 most engaged global accounts on social, and SportsCenter Next HS and the ESPN creator network bolster its bona fides among younger audiences. Over the last year, Taylor Swift, Deion Sanders, and Caitlin Clark drove a lot of social and linear business increasingly sparked by cultural and social media moments, Kelly said.
@espn 😮 #caitlinclark #wnba #basketball ♬ original sound – ESPN
Roz Durant, ESPN’s Executive Vice President of Programming and Acquisitions, said that the network will continue to use Disney IP, like Marvel, Toy Story, and Big City Greens, to improve its reach and storytelling chops by marketing to younger audiences.
The secret sauce to drawing and maintaining that younger audience, Thornton said, is making bespoke content at scale through social and digital while still being efficient. At some point, she continued, AI will help with that as well.
Pitaro was excited by being able to clip automated video highlights at a faster rate, text-to-speech and speech-to-text so he can listen to long-form investigative pieces on his commute, and most importantly, a personalized, AI-generated custom SportsCenter that Iger discussed on the most recent earnings call. For Mark Walker, ESPN’s Executive Vice President of ESPN Bet, Business Development, and Sports Innovation, AI uses are more practical. That includes better closed captioning across all platforms and improved customer service at the company’s call center.
The Bigger Picture
A couple of days before my trip to Bristol, ESPN reorganized executive ranks, led by President of Content Burke Magnus. A press release quoted Magnus, who said the shuffle will “improve collaboration, centralize functions, create better alignment, and redeploy resources to areas of growth – further positioning our people to deliver on ESPN’s priorities during rapidly evolving times.” In English, that means, he said, ensuring ESPN is “set up to succeed and address the challenges of the future” while creating “distinct lanes of responsibility across the board.”
“We need to set up this company to be relevant for the next generation of sports fans,” Magnus added.
The future, he told Boardroom, includes emerging sports like women’s college gymnastics and volleyball, the PLL and college lacrosse, and other women’s sports, including a whole host of SEC regular season events. However, Disney and ESPN’s future plans all build up to Feb. 14, 2027, when Super Bowl LXI returns to ABC — and for the first time linear cable and Flagship — for the first time in 21 years.
ESPN made it quite clear all day on that scorching Wednesday that the company is well on its way toward differentiating itself for the future as the cable and digital industry undergoes a massive sea change that’s been coming for many years. How its future plans turn out will determine whether ESPN stands the test of time and properly adapts or whether it becomes yet another lost relic on a long list of global behemoths nobody believed would ever decline or fail.
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