A report from Etan Vlessing of The Hollywood Reporter says FuboTV is leading a group which includes DirecTV, Dish Network and Newsmax in trying to get Congress to take a look at the proposed sports streaming joint venture between Disney, Fox and Warner Bros. Discovery.
The yet-to-be-named Disney-Fox-Warner Bros. Discovery streaming service has been hyped as a revolutionary force in the pay TV industry, which has been struggling due to a rise in cord-cutting. However, the group of streaming platforms spearheaded by FubuTV is concerned about their ability to provide live sports content with this new competition on the horizon.
The three companies announced the joint venture in early February. In that release, the description of the joint venture was ” to build an innovative new platform to house a compelling streaming sports service. The platform brings together the companies’ portfolios of sports networks, certain direct-to-consumer sports services and sports rights – including content from all the major professional sports leagues and college sports. The formation of the pay service is subject to the negotiation of definitive agreements amongst the parties. The offering, scheduled to launch in the fall of 2024, would be made available directly to consumers via a new app. Subscribers would also have the ability to bundle the product, including with Disney+, Hulu and/or Max.”
Below is the full letter sent to Congressional leaders:
Dear Chairs & Ranking Members:
We are writing to urge your Committees to hold hearings on the future of competition in pay-TV. Recent developments in the pay-TV market–including the programming giants’ new joint venture, a streaming TV service that would control 80% of national live sports broadcasts–raise serious competition concerns that call for Congress’s immediate oversight.
The JV between Disney, Fox, and Warner is expected to launch this fall, in time for the next NFL and college football seasons. In addition to controlling 80% of all national live sports broadcasts, the JV will control approximately 55% of all live sports (regional and national). We cannot think of any scenario in the history of the United States where consumer interests have been served when such an important industry–here, access to live sports–is effectively controlled by three programming giants which decided to combine forces instead of competing against each other.
Worse yet, these same programming giants enforce anticompetitive and inflationary contract restrictions on distributors that will insulate the JV’s streaming service from head-to-head competition because these contract restrictions prohibit competing distributors from offering consumers their own “skinny,” live sports bundle. However one measures it, the JV will eventually dominate the distribution market for live sports and will drive out competition, leaving consumers captive to the JV for live sports–unless Congress and regulators intervene.
When one vertically integrated company has the power and incentive to drive out its competitors–as this JV will–policymakers have previously stepped in to protect competition and consumers. For example, in the 1992 Cable Act, Congress enacted new program access rules that prevented vertically integrated cable operators from discriminating against new entrants in the pay-TV business, namely the then-nascent satellite TV providers trying to compete with cable.
We are at the same inflection point now. The JV partners demand that their competitors offer “big fat bundles” of programming (as described by Disney’s CEO) that include many unwanted but expensive channels, while their own JV service offers a much skinnier package consisting only of “must have” sports channels. Americans love their live sports and entertainment, and they expect Congress to ensure competition and choice in accessing these shows. We thus urge you and your colleagues to hold hearings as soon as possible on the future of pay TV.
Sincerely,
FuboTV Inc., DirectTV, American Economic Liberties Project, Open Markets Institute, DISH Network, Newsmax, Inc., Sports Fan Coalition, Electronic Frontier Foundation
