As cable and television move from their traditional model to one involving more streaming video, a number of traditional broadcasters and content companies have made investments in emerging video-on-demand services.
World Wrestling Entertainment (NYSE: WWE), a streaming pioneer in its own right with its subscription-based network, has joined Discovery Communications (NASDAQ: DISCA) (NASDAQ: DISCB) in investing in FloSports, a direct-to-consumer, subscription-based media company that live-streams niche sporting events. WWE and Discovery participated in a $21.2 million funding round, the fruits of which FloSports intends to use to accelerate its growth into new sports while expanding its existing verticals.
“We want to partner with world-class investors who share our vision to transform sports media,” FloSports CEO Martin Floreani said in a press release. “It’s exciting that visionaries in the media and OTT space have backed us to achieve this goal.”
What are WWE and Discovery investing in?
FloSports focuses on sports that get less mainstream media attention. Its 15 current verticals cover wrestling, track and field, MMA, elite fitness, boxing, fastpitch softball, gymnastics, non-NBA basketball, tennis, volleyball, cheerleading, and eSports, among others.
“We are the best direct-to-consumer solution for leagues, governing bodies and independent rights holders to monetize their events,” Floreani said. “In turn, this allows our company to serve millions of sports fans and supports our mission to grow the sports, the athletes, the events and the fans.”
Why does this investment make sense?
For WWE and Discovery, buying a slice of FloSports is about hedging their bets. Both companies are still largely rooted in the traditional cable world, and owning a piece of a company that offers an alternate path to consumers simply makes sense.
For WWE, it’s even more logical because FloSports has built up some audience in combat sports that often share fans with professional wrestling. It could partner with FloSports to offer some wrestling content through the service. In Discovery’s case, the match is less obvious, but with cable subscriptions falling, it makes sense for any company in that space to invest in streaming alternatives.