DOJ says it will review Disney-Fox-WBD sports streamer deal structure

Disney, Fox and Warner Bros. Discovery’s plans for a mega sports streamer has gotten the attention of the Department of Justice.

The department announced it will conduct a full antitrust review of the deal once it is finalized, sources told Bloomberg.

The plans, announced Feb. 6, 2024, sent shockwaves through the sports industry and almost immediately started garnering criticism of how such a powerful group of companies coming together could influence the sports broadcasting landscape and ad market.

Industry group ACA Connects, which represents smaller broadband, phone and video providers has already raised concerns and labeled the streamer 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,” said Grant Spellmeyer, the organization’s CEO, 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.”

ACA Connects called for a Justice Department review of the deal.

Fubo, which also offers a sports-heavy streamer, also announced concerns after news of the plan sent its stock price reeling. 

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

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Exact details, including pricing and programming, has not been finalized, but the unnamed service appears poised to become a powerhouse in reaching homes without traditional cable or satellite. 

A CNBC report indicated that $45 to $50 would be a logical starting point, while another report indicates plans are for pricing to come in below the cost of YouTube TV, which costs $72.99 a month.

The announcement did not that while each of the three partners will share one-third ownership of the venture, revenues won’t follow the same model; they will be split based on how rights to broadcasts are held.

The planned streamer does not include Paramount Global, which owns CBS, or NBCUniversal. Both of these media companies own significant sports rights as well, including CBS’s investment in basketball and golf and NBC with the Olympics and football.