Criticised move

In early February, major streaming service providers Walt Disney (NYSE: DIS), Fox (NASDAQ: FOX) and Warner Bros. Discovery (NASDAQ: WBD) introduced a new joint platform for streaming sports events. The benefit to consumers could be access to different types of live sports broadcasts and access to exclusive content from one platform. What seems like a great idea to the companies, critics see it as the opposite, pointing to the high projected price of the product that could deter consumers. Another problem is that these three companies control 60-85% of all sports content. Thus, the combined product will not only impact competing companies such as Amazon (NASDAQ: AMZN) or Apple (NASDAQ: AAPL), but also the sports leagues themselves, which sell their rights to these companies. U.S. streaming company Fubo, which offers sports content, called on U.S. authorities to investigate the project over competition concerns after the news was announced. However, according to Bloomberg Laws, the US Department of Justice will look into the project after the deal is concluded. In the meantime, the project is scheduled to launch at the end of this year.

Sport under one roof

The envisaged platform will be a combination of Disney's ESPN channel offerings and those of Fox and Warner Bros. and should offer consumers sports coverage from the US National Football League (NFL), National Basketball League (NBA), FIFA World Cup, Tennis Grand Slam and more. No further details of the project have been disclosed yet. At the moment, all that is known is that the platform will be owned by a newly formed company. The monthly fee for the service is also unknown, but it is believed that the initial price will be lower to attract customers, with increases coming later on. As reported by CNBC, the introductory price is expected to be no less than $30 per month, a significant increase over the packages currently offered. Basic pricing packages currently range from $6 upwards with advertising or $12 upwards without advertising, depending on the specific company.

Partnerships in the gaming sector

At the same time as unveiling the idea of a new sports platform, Disney has announced another investment in the gaming giant – Epic Games. Diney will inject $1.5 billion into Epic's stake in the company. According to Disney's CEO - Bob Iger - this investment is important because young people spend most of their time in the gaming space. However, this collaboration between Disney and Epic is not the first. The companies have already contributed characters from Star Wars, The Nightmare Before Christmas and the Marvel comic book world to the game Fortnite. The aforementioned investment should bring news from the world of entertainment, the games themselves, and should also bring new characters and stories not only from the movies mentioned, but also some new ones like Avatar.

The fairy tale apple

Connecting diverse and increasingly non-traditional collaborations in the digital world seems to be on the rise.  Apple and Disney combined entertainment and breakthrough technology when, just months after Apple introduced the Vision Pro headset to the world last year, they announced that the Disney+ platform would be available through its smart eyewear. Subscribers can enjoy an environment with vivid details from Disney's acquisition of fairy tales and movies as of February 2024.

Disney is certainly not holding back

As you can see, Disney is pushing the notional bar ever higher with its new products and innovations. If that wasn't enough, in March 2024, Disney will bring an extended version of the Taylor Swift concert film "Taylor Swift: The Eras Tour (Taylor's Version)" to their platform. The singer's concert tour broke several records, both in the amount of pre-sale tickets sold and in attendance and caused a crowd craze. The concert was already screened in cinemas. Thanks to Disney, fans will be able to enjoy the concert from the comfort of their own home. The company paid the singer more than $75 million for the opportunity.

The company's shares are on the rise

The Disney shares are reacting to the improving market conditions, but also to positive information about the projects the company is implementing, and are currently showing an increasing trend. However, they are still in a significant correction from their highs in 2021, when they were around $197 per share, while in the second half of February 2024 they are around $111 per share, up 23% from the beginning of this year*.

Walt Disney stock performance over the last 5 years (Source: tradingeconomics.com) *

Shares of Warner Bros. and Fox are weakening

However, the same cannot be said for Warner Bros Discovery shares, which have been on a downward trend since their last peak in 2022, when they faced a significant decline in value, and even the improving global market situation does not seem to be doing much for the giant's share price, which is hovering around the $9 per share level.*

Share value development of Warner Bros. Discovery over the last 5 years (Source: Google Finance) *

Fox's stock is also in the red numbers over the past five years, trading below $30 per share in the second half of February 2024, having written down 2% of its value since the beginning of the year.*

Fox's Class A share value over the last 5 years (Source: Google Finance) *

Olívia Lacenová, principal analyst at Wonderinterest Trading Ltd.

* Past performance is no guarantee of future results