Congressmen quiz Spulu partners over sports JV streamer plan

Source: Alamy.com

Two US Congressmen have written to the bosses of Disney, Fox and Warner Bros. Discover to ask a series of probing questions about the trio’s plans to launch a joint sports streaming platform.

House Judiciary Committee Ranking Member Jerrold Nadler and Representative Joaquin Castro, both Democratic Party representatives, expressed concern about the potential impact of the JV, as yet unnamed but dubbed ‘Spulu’ by the press, on the pricing of sports content and the collective power of the three groups to negotiate content licensing deals with the likes of the NFL and NBA.

“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,” the pair wrote.

In the letter addressed to Disney CEO Bob iger, Fox chair and CEO Lachlan Murdoch and WBD CEO David Zaslav, the two Congressmen said that the planned JV “raises questions about how this new offering would affect access, competition, and choice in the sports streaming market”.

The pair then pose some 19 questions for the execs, including how many subscribers it is projected to have, whether it will distribute the channels of non-JV partners, , and how the partners will set the pricing of their own sports channels.

They also ask how the planned prices compare with the prices at which the channels and currently licensed to third-0party distributors and whether there will be measures in place to prevent anti-competitive sharing of pricing between the three.

Other questions include whether customers will be able to bundle other products offered by the partners with the JV offering, and whether the partners aim to offer standalone streaming sports services.

In the case of Disney, the answer to the last question appears to be ‘yes’, given that Iger has already stated there will be a way for JV subscribers to add the ESPN app to their service offering, but that Disney has not yet determined whether this would be as an upsell or something else.

The Congressmen then ask how firewalls will be put in place to “ensure there is no collusion between the Joint Venture and their independent streaming sports offers”.

The pair also ask questions about how the partners will go about securing sports rights – such as whether they will continue to bid against each other – and whether they will negotiate jointly with distributors.