Although some have suggested that ESPN could move to a direct-to-consumer model without losing substantial revenues, BTIG Research analyst Richard Greenfield doesn't believe the national sports network can do that any time soon.

ESPN currently combines an industry-leading average per-subscriber fee of $6.61 in Pay TV with a national advertising reach of nearly 93 million homes. Pundit have suggested ESPN could move out of the pay-TV bundle and sell access to NFL, NBA, Major League Baseball and other sports leagues via a $30-a-month OTT service, quickly gaining around 20 million customers.

Greenfield disagreed. He argued that ESPN would see significant and immediate deterioration to its pay-TV subscriber base if it launched a direct-to-consumer (DTC) service. "It's worth noting that no basic cable network has ever ventured outside the safety of the bundle," the analyst said in a blog post. "While HBO and Showtime are now going DTC, they were always premium, a la carte offerings distinct from basic cable channels such as ESPN."

Such a move to DTC, he said, would mean that ESPN's existing contracts with pay-TV operators could no longer mandate that the channel be carried in the basic default tier. In other words, cable companies could freely follow Verizon's (NYSE: VZ) Custom TV model, and move ESPN and ESPN 2 to an add-on tier without risk of being sued.

Meanwhile, in order to sustain its CPMs, the Disney-owned sports channel would have to make up for dramatically reduced advertiser reach with precise audience targeting.

"While ESPN would certainly know far more about its viewers in a DTC world than it does in the current MVPD-driven environment, its dataset on its viewers would pale in comparison to companies like Google and Facebook," Greenfield said.

Technological readiness is at the heart of the analyst's argument. He believes that while ESPN has made advances at the server level to facilitate multiscreen, TV Everywhere delivery of its programming, it currently has nowhere near the know-how or infrastructure to manifest a 24-hour, live-streaming service for 20 million consumers.

"ESPN would need to spend aggressively to build the infrastructure necessary to support millions, let alone tens of millions of consumers streaming hours of video content per day," he said. "While outsourcing is also an option (given an existing relationship with MLB Advanced media for ESPN 3), this also increases their overall costs compared to the MVPD bundle where ESPN has no meaningful delivery costs."

To be clear, Disney CEO and Chairman Bob Iger reiterated to investors last week that ESPN won't launch a direct-to-consumer streaming product for at least five years. "So when we look at the universe we don't really see dramatic declines over the next say five years or so and therefore we are not taking what I would call radical steps to move our products into over-the-top businesses to disrupt that business because we don't think right now that is necessarily the greatest opportunity," he said, according to a Seeking Alpha transcript. "We just don't think it's necessary."

For more:

- read this BTIG Research blog post

Related articles:

Pay-TV execs are clearly 'disconnected from reality:' Change isn't 5 years away, it's now

DirecTV lost 133K subs in Q2; pushes pay-TV's total quarterly cord-cutting carnage past 500K

Programmer and pay-TV stocks get crushed as ESPN woes spur concerns of cord cutting, skinny bundles

ESPN has lost 3.2M subs in the past year; could pull itself off Sling TV

ESPN scratches and claws to sustain its margins amid souring pay-TV economics

Disney's Iger: 80% of ESPN sub losses were due to pay-TV contraction, not skinny bundles