The New York Times reports that ESPN and Microsoft are in talks to bring a subscription-based service to Xbox Live that would stream live sporting events through the Xbox 360, no pay TV connection needed.
The paper notes that none of this is official, sourcing anonymous "people close to the talks":
Microsoft has held in-depth discussions with the Walt Disney Company about a programming deal with ESPN, according to people close to the talks, who requested anonymity because the talks were intended to be private.
For a per-subscriber fee, ESPN could provide live streams of sporting events, similar to the ones available through ESPN 360, a service that is available from some high-speed Internet providers. Microsoft could also create some interactive games in association with ESPN, the people said, although a deal has not yet been struck.
Microsoft declined to comment, characterising the Times' report as "rumour and speculation". We've checked in with ESPN as well and will update the post if we hear anything back.
Xbox Takes on Cable, Streaming TV Shows and Movies [The New York Times via Geoff Keighley's Twitter]