DOJ to Launch Antitrust Review of Disney-Fox-WBD Sports Streaming Venture

Critics of the team-up argue that it’s “anticompetitive” and could potentially harm pay TV providers and consumers

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The Department of Justice plans to launch an antitrust review into Disney, Fox and Warner Bros. Discovery’s sports streaming joint venture, according to Bloomberg.

Regulators will review the terms of the agreement between the media giants once its finalized, the outlet noted, citing unnamed sources familiar with the matter. It added that the companies have not been notified about the review and that it may not lead to any action.

Representatives for the DOJ, Disney, Fox, and Warner Bros. Discovery did not immediately return TheWrap’s request for comment.

News of the review comes after ACA Connects, a trade organization that represents roughly 500 small and medium broadband, phone and video providers across the US, slammed the venture as “anticompetitive.”

“The ‘house of cards’ in the video marketplace continues to wobble. Allowing the biggest media players to join forces—while locking out traditional linear cable providers from offering the same package at the same price—only gives even more power and leverage to the Goliaths to extract more money from customers of ACA Connects Members,” ACA CEO Grant Spellmeyer said in a statement. “This clearly isn’t a functioning free market. With customers facing higher prices and fewer affordable choices, there needs to be a level playing field.”

Spellmeyer proceeded to call on the DOJ to launch an antitrust review in a separate interview with Bloomberg Law, arguing that it is excluding other programmers and “all the distributor networks that are out here — including small cable companies.”

Additionally, Fubo, a streaming service primarily focused on live TV sports, issued its own statement slamming the group after its stock fell 23% following the announcement.

“Every consumer in America should be concerned about the intent behind this joint venture and its impact on fair market competition,” the company said. “This joint venture spotlights a concerning trend where an alliance with significant market share, reportedly controlling 60-85% of all sports content, could dictate market terms in a manner that may not serve the broader interests of consumers. We believe our robust programming and quality product experience cannot be duplicated by what is likely to emerge from this joint venture.”

Fubo, which offers access to over 300 live sports, news, and entertainment networks, reached 1.88 million paying subscribers in the third quarter of 2023.

The joint venture will be launched in the fall, with each media giant owning one-third of the company, having equal board representation and licensing their sports content on a non-exclusive basis. The venture will have its own independent management team.

The offering will provide subscribers with access to content from linear sports networks including ESPN, ESPN+, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, FOX, FS1, FS2, BTN, TNT, TBS, truTV, as well as the ABC network. Content will include the NFL, NBA, WNBA, MLB, NHL, NASCAR, College Sports, UFC, PGA TOUR Golf, Grand Slam Tennis, the FIFA World Cup, cycling and much more. Subscribers would also have the option to bundle the product, with Disney+, Hulu and Max.

Fox CEO Lachlan Murdoch told analysts during the company’s second quarter earnings call last week that the venture would target around 60 million households that currently don’t participate in the bundled cable and pay television ecosystem, stressing that instead of focusing on “cord cutters” they’re going after “the cord nevers.” He added that the traditional pay TV market would remain Fox’s “dominant customer base for some time to come.”

Pricing details and a name for the service will be disclosed at a later date, though an individual familiar with the matter told TheWrap that the price point would be cheaper than YouTube TV, which charges $72.99 per month for its basic plan. CNBC reported a logical starting point could be $45-$50 per month.

Despite the one-third ownership stake for each company, the individual emphasized that the networks will not share revenue from the venture equally, with the companies expected to earn a similar carriage fee rate as they do through other distribution channels where their networks available. Citigroup analyst Jason Bazinet has estimated that the joint venture could control about 55% of US sports rights costs.

The joint venture notably does not include Paramount Global and Comcast’s NBCUniversal. Murdoch said that the joint venture is not considering adding new partners at its current stage.


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