The new 120 Sports venture will try to make its money from advertisements. The service will initially be free. There are plans to change to a premium pay level in 2015, but that will of course depend on reception and demand from the initial service.
Time Warner may have struck gold here with this equity investment and management deal for 120 Sports. If nothing less, Time Warner should be able to increase revenue from its own sports assets like Sports Illustrated and the Bleacher Report.
Sports is a key to both television and social media, and 120 Sports should be able to grow as the market grows. The company won't take anything away from ESPN, but might surprise investors at how big the potential sports programming market can still become.
At the time of publication, the author held no positions in any of the stocks mentioned.Follow @chriskatje This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.