Fox (FOX, FOXA), Warner Bros. Discovery (WBD), and ESPN — a subsidiary of Disney (DIS) —will be forming a joint media venture together to mainline sports streaming content. Wall Street Journal Disney Reporter Robbie Whalen, whose outlet originally reported on the news, comments on the opportunities this may provide these media giants if this deal goes through.

"People aren't subscribing to pricey cable bundles as much so you have to offer them sports content and other live content on streaming services," Whalen tells Yahoo Finance. "And the problem there on sports specifically is that rights to broadcast sporting competitions have gotten incredibly expensive in recent years."

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

JULIE HYMAN: Robbie, we just got the news reported by the Journal and others that Fox is teaming up with ESPN and Warner Brothers Discovery to create a joint streaming platform to share sports assets. Is that what investors want to see?

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ROBBIE WHALEN: I would only correct you by saying that it was first reported by The Wall Street Journal, my very talented colleagues. I'm incredibly proud of them for getting this huge scoop, which is revealing what seems to be the big ESPN news that everyone in the media world has been chasing for months and months. I mean, we've known for almost a year now that ESPN is looking for strategic partners. We're trying to disentangle Disney's fortunes from the fortunes of the cable TV business, because that business is, as Bob Iger put it in an interview when he was out of the company, falling off a cliff.

And so we saw this last year with the Charter fight where Disney got into a fight over carriage fees for Charter. The cable operators are saying it's too much to pay for these channels, given that we have tons of people cutting the cord every year. And so there's this massive kind of tension between the old way of doing business in media and in Hollywood and the new way of doing business.

So we see it in theaters, too. People aren't going to theaters as much. So you've got to make content for streaming. People aren't subscribing to pricey cable bundles as much. So you've got to offer them sports content and other live content on streaming services. And the problem there on sports specifically is that rights to broadcast sporting competitions have gotten incredibly expensive in recent years. We've seen some major moves, apple getting into the MLS, Amazon a few years ago getting into the NFL. And all of these new entrants into that market just drive up the prices for those sports rights.

So what we're seeing right now is Disney, Warner, and Fox kind of trying to band together to push back a little bit on that price setting that the sports leagues have really kind of taken charge of. And it's going to make things easier for them to bid on packages if this deal goes through, that is.