In a significant development within the sports media landscape, Senators Elizabeth Warren and Bernie Sanders, along with Representative Joaquin Castro, have formally requested the Department of Justice to probe a major new joint venture involving Disney, Fox, and Warner Bros. This new venture, dubbed Venu Sports, is set to merge the resources of ESPN, Fox Sports, and TNT Sports into a single direct-to-consumer streaming platform. The initiative has prompted serious concerns about potential antitrust violations and its implications for market competition.
The call for an investigation comes as Venu Sports is poised to enter the market with a subscription fee of $42.99 per month. This service promises to consolidate a vast array of sports content, including programming and games from ESPN, Fox Sports, and TNT Sports, along with additional content from their affiliated networks such as ABC and Fox. Moreover, ESPN+—ESPN’s separate direct-to-consumer service—will also be included. This move comes as ESPN plans to offer its own standalone streaming service next year, which is expected to be priced between $25 and $30 per month.
Currently, sports enthusiasts can subscribe to services like YouTube TV, which offers access to ESPN, Fox Sports, and TNT Sports for around $70 to $75 per month. These services also include other major networks like NBC and CBS, both of which have their own streaming products. Fox CEO Lachlan Murdoch has projected that Venu Sports will attract five million subscribers by 2029, underscoring the ambitious scale of this new venture.
Despite the enthusiasm from the involved companies, the proposed joint venture is already facing legal scrutiny. Fubo, a competitor that offers ESPN and Fox Sports but not TNT, is seeking a preliminary injunction in a Manhattan district court to block Venu Sports from launching. Fubo’s challenge is rooted in the argument that Disney, Fox, and Warner Bros. are not providing other platforms the opportunity to combine their content in this manner, which could be seen as anti-competitive.
The letter from Senators Warren, Sanders, and Representative Castro highlights concerns that Venu Sports could wield excessive market power. They argue that the combined resources of Disney, Fox, and Warner Bros. could dominate over 80% of nationally broadcast sports and half of all national sports content. This concentration of power, they assert, might allow Venu Sports to engage in anti-competitive practices, such as discriminating against rival platforms and driving up prices for consumers.
Further adding to the controversy, the letter contends that the proposed joint venture might conflict with the Federal Communications Commission’s (FCC) National Ownership Cap, which limits any single entity from reaching more than 39% of television households. ESPN, for instance, had a presence in approximately 100 million homes in 2011 but now reaches around 66.5 million households according to recent Nielsen data. ESPN’s strategy to adapt includes introducing various pricing tiers to appeal to both cable-cutters and those who have never subscribed to traditional cable services.
Fox Sports currently lacks a standalone paid streaming service, while TNT Sports is part of the Max platform, which also features HBO among other channels. The joint venture’s subscription revenue model is set to follow a similar structure to the revenue networks receive from cable and satellite providers, with ESPN anticipated to garner the largest share due to its substantial per-subscriber revenue.
As this complex situation unfolds, the Senators and Representative are urging both the DOJ and the FCC to scrutinize the venture closely and take immediate action if it breaches antitrust laws or fails to serve the public interest. The letter underscores the need for rigorous oversight to ensure fair competition and consumer protection in an increasingly consolidated media landscape.
As the investigation progresses, stakeholders from all corners of the sports media industry will be watching closely to see how this high-profile case impacts the future of sports broadcasting and streaming services.
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