Media companies are racing to figure out how to merge live sporting events with their popular but still cash-bleeding streaming services.
Sports continues to make its march to streaming.
Warner Bros. Discovery announced on Tuesday that it would begin adding live sporting events from the company’s cable networks to the Max streaming service in October. The streaming service will now include access to Major League Baseball playoff games, as well as regular season games from the National Basketball Association and the National Hockey League.
For several months, the sporting events will be free for all Max subscribers. But in late February — just as college basketball’s March Madness is about to get underway, and several weeks before professional basketball and hockey playoffs begin — access to the games will cost $10 a month on top of the standard Max subscription price, the company said. Currently, Max without commercials costs $16 a month, and the advertising-supported plan is $10 a month.
Media companies are racing to figure out how to fold in live sporting events with their popular but still cash-bleeding streaming services. The rights to the sporting events are often expensive, and are one of the last main drivers to broadcast and cable channels. (Warner Bros. Discovery carries live sports on its Turner cable networks.)
Recently, Charter Communications subscribers temporarily lost access to Disney’s cable networks, including ESPN, in a highly publicized dispute. Charter executives argued that Disney sought too much additional money for its cable networks even though it was prioritizing its streaming business.
Disney has signaled that ESPN will, at some point, be available to customers via streaming without a cable subscription. The dispute with Charter was settled this month.
Other media companies are providing access to marquee sporting events on their streaming services at no additional charge. Paramount offers football games through its streaming service, Paramount+. Peacock will stream a Wild Card N.F.L. playoff game early next year that will not be available on a cable or broadcast network. Amazon likewise has rights to Thursday Night Football at no additional charge to Prime Video.
That’s an approach that Warner Bros. Discovery “fundamentally disagrees” with, said JB Perrette, the president of the company’s streaming division.
“Our goal with selling it as an incremental tier is a belief that it’s too valuable — it’s something that has to have a separate charge,” he said in an interview.
“Our belief is we got to set up models that are viable for the long term,” he added.
Sports rights are expected to get more expensive, and the rights to N.B.A. games — including those now controlled by Warner Bros. Discovery — will be up for grabs in the next two years. Luis Silberwasser, the chairman of the company’s sports division, said that the leap to streaming would be appealing to both professional leagues and advertisers.
“For our clients, for our advertisers, and also for the leagues, they want reach,” he said. “They want to be able to reach the younger consumer.”
The sports tier will be branded as the Bleacher Report Sports Add-On (Bleacher Report, a sports website, is owned by the company.) It will debut on Oct. 5.
The change is part of a broader effort to try to lure new subscribers with live sports and news. Max currently has 95.8 million subscribers, fewer than Netflix and Disney+.
Max will also add the so-called CNN Max channel next week, which will include at least three flagship shows — ones hosted by Jake Tapper, Wolf Blitzer and Anderson Cooper — live from the cable news network.