Disney-Fox-WBD sports streaming JV catches more heat
Two US reps are concerned that the proposed Disney-Fox-Warner Bros. Discovery streaming sports JV will be anticompetitive. They've asked top execs to answer 18 questions about the new offering by April 30, and copy the US DoJ.
A proposed sports-focused streaming joint venture from Disney, Fox and Warner Bros Discovery (WBD) is facing a laundry list of questions from two US government representatives over concerns about how the new offering might affect access to sports programming and competition in the pay-TV market.
Rep. Jerry Nadler (D-NY), ranking member of the House Judiciary Committee, and Rep. Joaquin Castro (D-TX) raised 18 questions to the CEOs of the JV members – Disney's Bob Iger, Fox's Lachlan Murdoch and WBD's David Zaslav – in a letter (PDF) dated April 16.
Among those questions, the government officials have asked the execs to spell out the relevant markets impacted by the JV, whether the venture will distribute their sports package to non-JV partners and how the JV will determine pricing of their own sports channels included in the joint venture (and how they will compare with prices for distribution among other pay-TV service providers).
They also want to know the price for the coming service (analysts expect it to be in the neighborhood of $40 per month), and how many subs they project the JV's service to acquire in a period of one year, three years and five years. Murdoch has already suggested that the JV's offering, expected to launch this fall with more than a dozen channels and ESPN+, could net about 5 million subs in its first five years.
Questions also centered on how the JV will protect against anti-competitive sharing of pricing among the three members, and if the members of the JV will continue to bid against each other for additional sports rights as they become available.
"[T]he Joint Venture raises questions about how this new offering would affect access, competition, and choice in the sports streaming market," the reps wrote. "Without more complete information about the pricing, intent, and organization of this new venture, we are concerned that this consolidation will result in higher prices for consumers and less fair licensing terms for upstream sports leagues and downstream video distributors."
They've set a response deadline of April 30, 2024, and asked that a copy is sent to the US Department of Justice, which reportedly plans to take a closer look at the JV to analyze its potential harm on consumers, other media companies and sports leagues.
Other hurdles
The proposed sports streaming JV is already facing an antitrust lawsuit from Fubo, a sports-focused virtual multichannel video programming distributor (vMVPD), over concerns that the JV could harm competition and raise consumer prices.
Execs at DirecTV and Dish Network/Sling TV have filed declarations of support related to the Fubo lawsuit.
"DirecTV has grave concerns about the effect that the sports content joint venture between defendants in this case will have on competition for the distribution of sports programming," wrote Robert Thun, DirecTV's chief content officer.
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