The news: Fox is teaming up with ESPN to bundle their upcoming sports streaming services, per Deadline.

• The bundle will focus on Fox One and ESPN and marks the first major sports rights package, though programming from Fox’s broadcast network and its local stations will also be available.
• The bundle, set to debut October 2, will cost $39.99 monthly, per Deadline’s announcement.
• Disney (which owns a majority of ESPN) and Fox have described their respective new streaming services as complements to their linear offerings.
• ESPN’s app will also be available as a bundle with Disney+ and Hulu for $35.99 monthly, per CNBC.

Disney and Fox’s sports push: Both companies have taken note of how an attractive sports slate will drive growth—and how a lack of one will prevent it.

• Disney’s Upfront results fell flat because of an absence of sporting content in its streaming division. Disney lacks tentpole events like the Super Bowl and keeps the majority of its sports inventory siloed in ESPN.
• Making ESPN’s streaming offering available for bundling with both Fox and Hulu/Disney+ unlocks an opportunity for Disney to bundle its sports properties with broader entertainment while still profiting from the massive potential sports offers—key to promoting future growth.
• And Fox is already riding the wave of success from its sports investments. The network saw double-digital growth YoY across its sports properties, with core properties excluding the World Cup surpassing $2 billion for the first time in Fox’s history. Bundling with ESPN gives Fox steady footing for its newest streaming offering to continue its sports-centric push.

Our take: An ESPN and Fox bundle will undoubtedly unlock major advertising opportunities for the channels as advertisers turn to sports as a key driver of revenues.