Congress Questions Disney, Fox, Warner Bros.' Sports Streaming Plans
The joint venture between Disney, Fox and Warner Bros. Discovery, which aims to launch a new sports streaming service, has captured the attention of Congress. In a letter to the company CEOs, Representatives Jerry Nadler and Joaquin Castro expressed concerns about the potential impact on competition and consumer prices and requested answers to 19 detailed questions by April 30. The Democrats raised issues about how the new offering would affect access, competition, and choice in the sports streaming market, and warned that without more information about pricing intentions, the consolidation may result in higher prices for consumers and less fair licensing terms for upstream sports leagues and downstream video distributors.
The letter came after reports of an antitrust review by the Department of Justice and antitrust litigation from Fubo, which is seeking to block the joint venture. The sports streaming platform alleges that Fox, WBD, and Disney have engaged in anticompetitive practices to block its business. Fox, WBD, and Disney have filed motions to dismiss the lawsuit, arguing that it is a transparent attempt to gain better commercial terms through litigation rather than negotiation.
The unnamed service, scheduled to launch in the fall of 2023, will feature content from linear sports networks including ESPN, ESPN+, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, FOX, FS1, FS2, BTN, TNT, TBS, truTV, and the ABC network. The service will also include content from the NFL, NBA, WNBA, MLB, NHL, NASCAR, College Sports, UFC, PGA TOUR Golf, Grand Slam Tennis, the FIFA World Cup, cycling, and more. Subscribers will have the option to bundle the product with Disney+, Hulu, and Max.
Fox, Disney, and WBD will each own a 1/3 stake in the venture, have equal board representation, and will license their sports content to the joint venture on a non-exclusive basis. The companies are expected to earn similar carriage fees as they do through other distribution channels where their networks are available. Fox CEO Lachlan Murdoch has stated that he is not overly concerned about regulatory scrutiny, believing that the offering is targeting 50 to 60 million "cord never" households that are not currently being served. The venture is aiming for 5 million subscribers within five years of its launch.
Despite concerns raised by Congress and other competitors, the joint venture partners are proceeding with their plans with an anticipated launch later this year.