As linear TV viewership has consolidated around live sports over the last decade, it’s created stresses on media company spending, then consumers’ wallets, as rights fees have escalated considerably for both pro and college sports.

While that hasn’t had much of an impact on U.S. professional sports expansion — the NHL is the only one of the big four leagues to add any teams in the last 20 years — it’s fueled consolidation in college sports that has crippled various conferences (the WAC, Big East football and the Pac-12, most notably), and created nonsensical alignments no longer based on regional rivalries, but TV markets. The idea there, of course, being that college conferences and universities would be more valuable to networks with more and bigger names.

That worked, as evidenced by the haul (over a billion dollars) the Big Ten will receive from Fox, NBC and CBS. But it’s also helped fuel pro sports rights that appear to be spiraling out of control as well, without any new or better inventory to make the case.

When combined with TV’s push to streaming that was supercharged during the pandemic, networks are now in dire straits. They have to continue to increase streaming prices to pay for content investments, while also introducing more ad tiers, and continuing to pay for sports rights to justify what’s been spent on these services to-date. And yet, all of that has led us to Tuesday’s big news item (via the Wall Street Journal):

Fox, Warner Bros. Discovery and Disney Create New Sports Streaming Venture

The prospect of this three-part partnership basically hits reset on everything we’ve known about sports streaming to-date. Though it appears that ESPN will still be developing its own direct-to-consumer app, this joint venture seemingly bails the other two parties from some of its major challenges ahead.

Fox, long the least-invested in streaming of the major U.S. media companies, doesn’t have to try to turn Tubi into something it isn’t, nor does it have to effort to push people into a Fox Sports app that can be limited on inventory. WBD, meanwhile, could potentially bail on its delayed implementation of live sports within the Max app. Since WBD is already looking for any and all ways to save money right now, this also creates some savings, and also keeps them in the race to retain NBA rights in a new deal — even if that retention makes it look a lot like what ESPN’s NBA rights will look like in a joint setting.

For ESPN, the path here is less clear. Though it’s collaborated with both Fox and WBD on past rights deals, its head-to-head fights with Fox have been a large part of what’s helped drive rights fees and consumer subscription prices up over the years. By placing its content side-by-side with Fox’s now, does it get the last laugh as it avoided paying some of the insane price tags?

Additionally, whether ESPN has its full content feed available or just ESPN+ (the news says that ESPN+ subscribers will have access, but that doesn’t include the streaming content currently available for those subscribed to ESPN through MVPDs), this creates a flattening of the sports streaming market after so many years of battles between these networks.

Without any inside info, it would seem to me that is only good news for Fox, WBD and ESPN going forward. It’s less ideal for leagues that are still planning to negotiate (like the NBA), since there’s seemingly less competition to pay the expected large fees. It could also create some long-term trouble for sports streamer Fubo, and you have to think that the two major network players left out here can’t be thrilled either.

Take a look at the chart below, which shows how the already consolidated sports rights space just got even smaller, while leaving out NBCUniversal and Paramount.

Sure, they may have been asked if they wanted in. But realistically, why would Paramount or NBCU been onboard with a joint venture like this? Both have spent billions building streaming services (Paramount+ and Peacock, respectively) that are substitutes for TV AND that lean at least in part on live sports.

Peacock, in particular, is built on the idea that it’s a major home for live sports. Along with its slate of exclusive Olympic content every two years, the service is also home to a good deal of English Premier League action in the U.S., a Notre Dame football game every fall, and this January, an exclusive NFL playoff game.

I’m not proposing that a joint streaming venture stops ESPN, Fox and WBD from being separate entities. It doesn’t. But look at that graphic. Even if not exclusive of EVERYTHING you’ll want to watch sports-wise, those three combining forces makes for a whole lot of viewing hours that could have otherwise been spent on Peacock or Paramount+. And as subscription fees go up and consumer wallets continue to tighten around how many services they can possibly subscribe to, the bundled option will seem even more appealing over the rest, provided the price keeps it competitive with the rest of the marketplace (likely).

Consolidation is nothing new for TV and streaming, and it seems poised to continue even after this announcement. But with consumer costs around this content staying high, and the differentiation between all of these offerings shrinking, you do start to wonder what the point of all of this was in the first place — beyond just finding new and creative ways to grow the revenue pie for these media companies.