The exec behind ESPN+ shares Disney's plan to make streaming sports a success — even if Venu never launches

• ESPN+ brought Disney's streaming business to profitability in its latest quarter.
• However, challenges like competition from social media and fragmentation remain.
• Executive John Lasker shared how he's making ESPN into a streaming powerhouse.

ESPN+ has quietly become a big asset for Disney in the streaming wars and a lifeline in the increasingly challenging sports space.

ESPN's streaming service made Disney's direct-to-consumer business profitable for the first time ever in its latest quarter . Its $66 million of earnings offset a $19 million loss for Disney+ and Hulu, after the inverse was true before . ESPN+'s average monthly revenue per subscriber rose from $5.45 to $6.23 in Q3 due to higher prices and advertising revenue, Disney said in its 10-Q .

In a cutthroat streaming landscape, ESPN+ has attracted about 25 million subscribers by offering exclusive college and professional sports along with some, but not all, of the main network's content. For everything the self-proclaimed Worldwide Leader in Sports has, including shows like "First Take" and "SportsCenter," sports fans still need a pay-TV service — for now.

Next fall, Disney plans to launch what it's currently calling "ESPN Flagship," which will include all of ESPN's content, including ESPN+.

That leaves no time to rest for John Lasker, the senior vice president of ESPN+ who's overseen its growth strategy since its launch in 2018. Lasker joined ESPN's sales team 25 years ago and pivoted in 2006 to digital media, where he led ESPN's early streaming efforts, like WatchESPN.

"We're trying to fill as many of the spaces, if you will, and create as much [optionality] for different types of interests and different types of sports fans and different types of pricing tiers that people might be interested in — not making any assumptions on what people's interests are," Lasker said in an interview.

How ESPN is moving beyond the cable bundle

Lasker's aim is to reach sports fans across generations, from pay-TV subscribers to the millions of cord-cutters and the growing number of cord-nevers who haven't paid for cable.

This time next year, sports fans may have the option to watch ESPN on cable, services like YouTube TV, ESPN+, an ESPN tile on Disney+, ESPN Flagship, and — pending a successful appeal — Venu Sports.

Venu is a pay-TV alternative designed to stream sports from Disney, Fox, and Warner Bros. Discovery, but its launch was blocked in mid-August by a judge in a crushing setback to those three media giants.

An ESPN spokesperson issued the following statement about the ruling against Venu, which came a day after BI spoke with Lasker: "We respectfully disagree with the court's ruling and are appealing it. We believe that Fubo's arguments are wrong on the facts and the law, and that Fubo has failed to prove it is legally entitled to a preliminary injunction. Venu Sports is a pro-competitive option that aims to enhance consumer choice by reaching a segment of viewers who currently are not served by existing subscription options."

That ruling puts an even bigger burden on ESPN+, as it's increasingly crucial for Disney's streaming and sports strategies.

With or without Venu, Lasker's team must guide consumers through a crowded and potentially confusing list of options. The executive is confident that the differences will become clear through pricing.

"A lot of that work will have to be done really at that point of price," Lasker said.

ESPN+ will stick around as a cheaper standalone option, Lasker said, though he hopes it will help get sports fans to pay more, whether it's for pay TV, Flagship, or one of Disney's streaming offerings. Bundles are crucial for Disney since they drive revenue and keep customers around.

"Getting folks into these more robust packages and more robust offerings, and then also them actually recognizing value in these, which those bundle subscribers largely do — it certainly helps mitigate the churn aspects," Lasker said.

Despite challenges, ESPN is ready for a 'new world'

Once the undisputed outlet for sports games and highlights, ESPN must now fight for attention with YouTube, TikTok, and other social-media services, noted Davis Noell of Providence Equity Partners, who coleads the media-focused private-equity firm's investments in North America.

"ESPN will have to evolve from that, because that's not going to be the place where they're going to get a lot of viewership," Noell said of sports highlights.

Mark Patricof, the founder and CEO of sports-focused private-equity firm Patricof Co., is skeptical ESPN will be as relevant in the 2020s and 2030s as it has been. The network is at risk of being disrupted by deep-pocketed tech companies like Amazon, which has made huge investments in sports .

"Creativity is going to have to drive the success of that business going forward," Patricof said. "It's not going to be being clever from a technology standpoint or trying to outsmart Apple and Amazon and Google — that's not a winnable strategy."

Competition and fragmentation are serious obstacles, but Noell is more bullish on ESPN's prospects, as long as it makes strides in streaming.

"People associate, obviously, ESPN with sports and having the best sports content and having the best sporting programs," Noell said.

The pressure is on Lasker and his team — to deliver profits, to be a ballast against the cable bundle's decline, and to keep ESPN relevant in the streaming age, potentially without Venu .

"Here we go into this new world," Lasker said. "We're highly confident we'll serve sports fans in new and compelling ways across our platforms."