Three of the biggest sports TV companies in the U.S. are creating a joint streaming venture with all of their linear sports TV content, the firms announced Tuesday.

Why it matters: The new service is intended to reach sports fans ditching pricey cable bundles.

• Each company — ESPN, Fox and Warner Bros. Discovery — will own one-third of the venture, and they'll need to select a management team, branding and pricing.
• The new service is expected to launch later this year and be available through a new app, built by a team that will be separate from the management leaders at the three companies.

Details: The standalone subscription streaming service will house an unprecedented amount of live sports content from sports networks across all three companies.

• It will primarily monetize through consumer subscription fees. Each network will continue to sell ads against its content on its own networks.
• Each of the three companies involved will have equal board representation for the joint venture. They will each license their sports content to the joint venture on a non-exclusive basis.

How it works: The service will include content from linear TV networks housed by the three companies, which include ESPN, ABC, TNT and Fox, among others.

• It will also include live sports content from ESPN+.
• Those networks all have rights to all of the major professional sporting league events, including the NFL, MLB, NHL, NBA, the major college sports divisions and more.

Between the lines: The joint venture that was first reported by the Wall Street Journal has been agreed to on principal terms by all three firms, which have all independently evaluated the opportunity for any regulatory concerns.

• The formation of the service is subject to negotiations among the parties and distributors, with whom the three companies are in early discussions about rights.

The big picture: Live sporting events are the only type of content left that's holding the cable bundle together.

• Even so, millions of people are dropping their cable and satellite subscriptions at a record pace as more live sporting events move to streaming.

What to watch: ESPN is planning to launch its own, separate direct-to-consumer service in 2025, CEO Bob Iger confirmed late last year.

• The network is still in talks with major sports leagues and streamers about a possible strategic partnership. 

Editor's note: This article has been updated with new details throughout.