A future sports streaming service created by Disney, Warner Bros. Discovery, and Fox is facing backlash from Congress.
According to The Hollywood Reporter, Disney CEO Bob Iger, Fox CEO Lachlan Murdock, and Warner Bros. Discovery CEO David Zaslav received a letter requesting their response to probing questions about the proposed venture from Reps. Jerrold Nadler and Joaquin Castro by April 30, with instructions to “please copy the Department of Justice in your response.”
In February, Disney announced the unnamed streaming platform in a surprising move, which Iger called “an important step forward for the media business.” The channel promises to offer live linear channels such as ESPN, ABC, Fox, TNT, TBS, as well as games and other sports rights from all three media giants. The service is expected to launch in the fall before the NFL season kicks off.
The deal would mark the first time that Fox’s live sports events are available on a streaming platform. Currently, consumers can only access Fox’s live sports events, such as NFL, MLB, or college sports, by subscribing to cable TV or a virtual MVPD like YouTube TV.
NBCUniversal, which holds rights to “Sunday Night Football,” college games, and the Olympics, and Paramount, which owns CBS Sports, Sunday afternoon NFL games, live soccer matches, and college rights, were not part of the new venture.
However, the move has drawn the attention of Fubo TV, which is now suing to block the joint venture.
“The Joint Venture raises questions about how this new offering would affect access, competition, and choice in the sports streaming market,” the Congress members’ letter says. “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 letter from Congress also questions the pricing, distribution, rights, and the possibility of monopolizing sports entertainment. The concern has suggested that the joint venture could undercut their rights deals and provide limited options for viewers who couldn’t get similar packages.
“The Joint Venture Partners currently bid against each other for sports content. However, the new venture will be pooling sports content among the Joint Venture Partners. Will the Joint Venture Partners continue to bid competitively against one another for sports rights as they become available?” the letter states.
The representatives add, “Will the Joint Venture Partners continue to require that MVPDs and virtual MVPDs purchase other programming in addition to their sports channels as a condition of their licensing agreements? Will the Joint Venture Partners continue to require penetration minimums for their sports and other channels when negotiating with MVPDs and other virtual MVPDs?”
For several months, discussions have revolved around whether Iger would sell Disney’s stakes in ESPN after expressing disappointment with its performance in the Disney+ bundle (which includes a subscription to Hulu). However, Iger walked back his comments about selling major assets, stating, “I did not anticipate everyone running with a story that everything is being sold, which is not the case.”
The future of the unnamed streaming service is in limbo as everyone attempts to find a fair streaming service that doesn’t monopolize sports entertainment.
