US DoJ set to probe Disney-WBD-Fox sports streamer plan

Source: NFL

The US Department of Justice is to probe the joint sports streaming platform that Disney, Warner Bros. Discovery and Fox plan to establish in the US, according to a report by Bloomberg.

According to the report, the DoJ is concerned that the trio’s joint project could negatively impact consumers, sports leagues and rivals.

Bloomberg said that the DoJ will examine the deal when the terms are finalised, citing unnamed sources.

The planned joint streamer will host a range content from major sport leagues and competitions, including NFL, NBA, WNBA, MLB, NHL, PGA Tour, PGA Championship, The Masters, Wimbledon, US Open, Australian Open, UFC, Formula 1, Nascar, FIFA World Cup, LaLiga and Bundesliga.

Concerns from rivals

One rival streamer, Fubo TV, has publicly expressed concern about the planned joint venture.

“Every consumer in America should be concerned about the intent behind this joint venture and its impact on fair market competition. 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,” the streamer said in a February 7 statement.

Fubo TV added that it believed its own “quality product experience cannot be duplicated by what is likely to emerge from this joint venture” and expressed scepticism about the new streamer’s prospects. (“We have already seen that a consortium born of historical competitors is a difficult undertaking, and streaming joint ventures rarely work,” it said, acing that “we know sports-only programming is highly challenged”.)

Pay TV operators who carry the three partners’ programming have also expressed concern privately, according to a report by CNBC.

Operators are reportedly concerned about whether they will continue to be able to offer a parallel bundle of services, matching the joint offering of ABC, ESPN, ESPN2, TNT, TBS, Fox, Fox Sports 1, Fox Sports 2 and other channels that is expected.

Operators are inclined to the view that the joint streamer’s success will be dependent on excluding them from providing the same services as a standalone offering, according to the report.

Programmers have until now been reluctant to allow distributors to unbundle sports, while contracts between them include provisions that prevent the former from favouring one platform over another.

Bob Iger’s comments

Speaking on Disney’s last quarterly earnings call, the media giant’s CEO Bob Iger said that the joint streamer would help to capture “fans moving away from the full cable and satellite bundle”, a comment unlikely to reassure pay TV operators.

Iger also expressed a belief that the streaming venture will enable Disney to have its cake and eat it, arguing that “we’re going to get paid in this new joint venture for our channels at a level that’s commensurate with the level that we get paid for those channels in the multi-channel ecosystem”, meaning that if the sports streamer helps drive cord-cutting, Disney won’t lose out, with gains here offsetting reduced revenue from multichannel fees.