The streaming sports joint venture of Disney, Fox, and Warner Bros. Discovery is a lot less revolutionary than the popular press seems to think. It does sound like something the sports fan might be requesting -- nearly all of the sports on cable, without the non-sports to clutter (and push up the price of) the package.
Disney brings to the table ESPN and a number of other full-time sports services and ABC. Fox has the Fox broadcast network and Fox Sports 1 (among others). Warner Bros. Discovery brings the general entertainment channels TNT, TBS, and truTV which each carry some sports (truTV only has a sliver of sports -- a few games during March Madness).
Unlike Netflix or Amazon Prime, this service will not just carry the games, but will also carry all the other stuff on the included channels. So, the experience of watching the NBA on TNT (supplied by WBD) in this service will be the same as watching it on cable. When the game ends, NCIS or Charmed or another entertainment program will follow it.
The as-yet-unnamed service will be carrying linear channels, much like any other virtual multichannel video programming distributor or MVPD (e.g., YouTube TV, Hulu with Live Channels, Sling). Calling it a "streaming service" is a bit of a misnomer, since that term usually describes a mostly on-demand assortment of programs with a sprinkling of live sports.
In essence, what this new service will provide is a sports-oriented skinny bundle, which is essentially the part of the market that fuboTV has staked out. The issue for fubo was (and is) that the sellers of the channels with live sports were generally unwilling to sell the sports channels at the time that fubo launched in January 2015 without fubo also taking their non-sports channels. For example, Disney would really prefer a distributor to carry the Disney Channel and FX in addition to its suite of ESPN sports services (e.g., ESPN, ESPN2, ESPNews, Longhorn Network). It might not be that Disney would not sell the sports services separately, so much as Disney would make the deal terms far less attractive if the non-sports channels were excluded. So fubo's attempt to super serve sports fans ended up being mostly a replication of the full channel lineup carried by the leading MPVDs, with only a few exclusions (channels from cable programmers without any sports programming like AMC, A&E, and Hallmark).
Among the three partners, nine years later, they were willing to sacrifice the non-sports services, provided that the other guys did, too. Because the new service is carrying linear channels, there is no new grant of rights needed from the suppliers of the programming -- the sports leagues. To them, this is a new MVPD.
It is unclear to me if there is much of a market for this service. If it were significantly less expensive than the full cable package, there may very well be. However, each of these programmers is likely selling their channels to the new service at full rate card. The technical costs of streaming the channels to customers costs money as does customer service and processing credit cards. It is unclear if this package can be sustainably much cheaper than cable or a vMVPD.
What is clear is that the package will be without a bunch of high profile sports -- notably those controlled by NBC and CBS and smaller sports services like Tennis Channel -- and that lacking those and the cable entertainment and news channels, the package might be less-than-satisfactory in meeting the needs of families, where a package that has sports and also has Nickelodeon, Fox News and Lifetime might seem like a better deal, even if it costs a bit more.
Another ramification is that all of the MVPDs will see this package and ask for similar packaging rights on their systems. The affiliate sales staffs of Disney, Fox and WBD are probably not looking forward to those discussions.
WBD may be the biggest relative winner among the partners, since this new MVPD will fully distribute most of its costly entertainment programming (which runs on the three included channels), while its Cartoon Network and TCM are on the outside looking in. The sports services from Disney and Fox are pure plays; their entertainment services don't have any sports.
Update: fuboTV clearly sees the new venture as a threat, as it felt compelled to issue a press release about it.
Update (16 Feb 2024): The MVPDs' concerns come out in this CNBC story regarding them seeking similar packaging rights for these channels as the the joint venture appears to have.
Update (20 Feb 2024): fuboTV has sued the joint venture claiming antitrust violations related to less attractive licensing terms for the sports channels. fuboTV's press release The US Department of Justice is interested in such an argument, per Bloomberg Law via Reuters. Clarifications to the original post were added and are marked with italics.