ESPN-Fox-WBD Sports Streaming Venture, Snap Plummets, Profit Drivers for Uber and Ford 2/7/24

Jim Cramer (0:00)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:07)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber, at post nine of the New York Stock Exchange. Futures are trying to find their legs here as corporate earnings come in with some examples of solid guidance and New York Community Bank bounces pre-market. Big day for FedSpeak and a 10-year note auction. Roadmap begins though with upending TV sports.

ESPN, Fox and Warner Bros. Discovery set to launch a joint sports streaming service.

David Faber (0:32)

Plus, snap shares are tumbling. The company delivered weak guidance on continued headwinds at sites from the Israel-Pamas War.

Board shares appear to be popping ahead of the open. The automaker rethinking its EV plans, boosting its dividend and offering better than expected or a better than expected outlook.

Carl Quintanilla (0:52)

Let's begin with ESPN, Fox and Warner Bros. Discovery teaming up to launch that streaming platform. David was here working late last night and I know you got more this morning.

David Faber (1:00)

Yeah, you know, listen, it's an important moment in terms of the cable ecosystem or the disappearance of the cable ecosystem in many ways.

And a big step forward, some would think, in terms of at least what is this complex world that we're in here in terms of trying to get a hold of sports programming as a viewer and figuring out where it may be. The ultimate goal here for these companies is to create an app that allows, for example, a younger gentleman who cares about sports to access it without having to pay for the entire cable bundle. As we all know, of course, that is going away very quickly. Show you that chart that came up there briefly, a bit more to explain that. But overall, it brings together these three providers and all of their sports programming, which will cover a wide variety of sports, not quite all of it, but much of it. They will have a third ownership interest each, but the revenues will flow through in a different mix, because ESPN, for example, with higher fees, paying more to the leagues, will get a higher percentage of the revenues, at least at the outset, it would appear.

And so that's how it's going to work. So the overall entity itself, how much value will really accrete to it over time is unclear. You know, perhaps you get naming rights, perhaps there's gaming partners. So there will be some value for this yet to be named, to be launched in the fall entity.

I am told pricing-wise, it'll be above 40, but not that much above 40 bucks a month. But that does give you a sense as to what we're talking about here. It's not an insignificant compilation of a lot of sports rights, right? So it's not going to be cheap, but the idea again is to get that, that never, the one who would never subscribe to the bundle and or who falls off the bundle, but still wants access to sports. Although if you care about, you know, your regional sports networks, for example, and your local teams, that becomes still an issue to some extent.

They are going to have what I am told is a fairly high-profile executive. I believe they have already identified this person who is going to run it with what I am told is a good track record from a well-known company. We will see. But they are often running. And Jim and Carl, it comes back to, and we can bring that chart up now from Moffitt and Nathanson, what we have been talking about for years, but what has continued to increase in pace, that is each quarter since 2018, the percentage decline in terms of the people who have either a virtual MVPD, meaning a YouTube, which now has eight million subscribers, by the way, or the traditional cable bundle. And that percentage decline keeps increasing, not decreasing, and that is forcing all of these providers to figure out ways to keep these subs or find them in the new world.

Jim Cramer (4:05)

Okay, so I have the full Comcast package, all right? And I have Peacock.

What changed in my life? What will change?

David Faber (4:15)

If you're a Comcast subscriber, in other words, you get your cable via Comcast, nothing.

You'll still get all your sports, because you're getting ESPN, you're getting Fox, you're getting Turner on Comcast, and you're paying for them. You're also getting news, and then you're getting those shows that you like to talk about the...