US Justice Department to review Disney-Fox-Warner sports streaming deal: Report
What's the story
The US Department of Justice (DoJ) is gearing up to examine a proposed streaming service collaboration between Walt Disney, Fox Corporation, and Warner Bros. Discovery, according to Bloomberg Law.
This comes amid concerns that the partnership could negatively impact consumers, media competitors, and sports leagues.
Regulators will examine the terms of the joint venture once they are finalized. The companies haven't been informed of the upcoming review, and it may not lead to further action.
Scenario
Plans for a new streaming service
Earlier this month, Disney, Fox, and Discovery revealed their plans for the streaming service, which would bring together content from Disney's ESPN and ABC networks, Fox, and Warner channels like TNT and TBS.
According to Citi analysts, this venture could control around 55% of US sports rights by cost, totaling $14.4 billion of the $26.7 billion spent in 2024.
Availability
Trio has an extensive collection of sports rights
The Disney-Fox-Warner trio possesses a broad portfolio of professional and collegiate sports rights.
The new collated streaming service would let viewers access hundreds of hours of Major League Baseball, the National Basketball Association, the National Hockey League, NASCAR, and college basketball from one location.
However, only approximately half of the highly prized sports franchise, the National Football League, would be accessible on this service, as Comcast's NBC, Paramount Global's CBS, and Amazon hold rights to specific games.
Concerns
Sports rights apprehensions and competition
Smaller cable providers and at least one sports-focused internet TV service (supposedly Fubo) have voiced their objections to the deal, arguing that it will ultimately lead to higher prices.
Steve Salop, an emeritus Antitrust Professor at Georgetown Law School, stated that the deal "reduces the number of options" for sports leagues to sell their rights.
The Justice Department has chosen not to comment on the issue yet.
Upcoming
Future plans of the participating media companies
Disney CFO Hugh Johnston has told Bloomberg TV that the three media companies behind the upcoming sports streaming service will continue to compete for sports rights.
Disney still aims to launch a streaming version of its flagship ESPN brand within a year. It will offer interactive features, costing less than the new joint offering.
Fox currently lacks a subscription-based streaming service for sports content. On the other hand, Warner Bros.' Max service requires a $9.99 add-on for live sports streaming.