Congressmen Call on Disney, Fox, Warner Bros. Discovery to Share More Details on Joint Venture Streamer
Government officials are taking a closer interest in the JV streamer, which has already drawn scrutiny from competitors and the DOJ.
The ambitious new sports streaming joint venture from Disney, Fox, and Warner Bros. Discovery has the potential to be a market-changing product when it launches. The platform will feature complete livestreams of 14 channels, as well as all the content from ESPN+, in a sports-focused bundle that will cost much less than a standard cable or satellite subscription. Now, government officials are taking note of the platform, and two congressmen have asked the CEOs of the three companies involved to appear and share more details about the service, and for the Department of Justice to be involved as well.
- Reps. Jerry Nadler (D-NY) and Joaquin Castro (D-TX) have submitted an open letter to the three CEOs asking for more details.
- The congressmen write that they’re “concerned” the platform will lead to higher prices and less fair licensing terms.
- The three CEOs have until April 30 to respond to the request for more information.
The letter originated with Congressmen Joaquin Castro (D-TX) and Jerry Nadler (D-NY), who have requested the three CEOs provide solid information about the JV streamer. In the letter, the two congressmen ask that the Department of Justice be looped into the information-sharing as well.
“The Joint Venture raises questions about how this new offering would affect access, competition, and choice in the sports streaming market,” the letter reads. “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.”
Details asked for by the two congressmen include the projected price of the service, how that price compares to the rate charged to other distributors by the three companies for the channels included, and whether third-party products will be available to bundle with the platform as well. They ask that Disney CEO Bob Iger, Fox head Lachlan Murdoch, and WBD chief David Zaslav respond to the letter by April 30.
Who Has Raised Objections to the Joint Venture Thus Far?
This letter from Congressmen Castro and Nadler is just the latest indication that the JV streamer’s path to market will be a rocky one. The DOJ has already promised a review of the service for possible antitrust concerns, a review which could be aided or hindered by the information Disney, Fox, and WBD choose to provide in response to the letter.
Fubo has taken a more direct approach, filing a lawsuit also based on antitrust issues to try and prevent the streamer from getting to customers at all. DIRECTV and DISH have both filed statements of support for the suit, though have stopped short of joining it or initiating any legal action of their own against the three companies.
Local TV station owners who distribute affiliates of channels like ABC and Fox have also made their concerns about the JV known, saying it could leave them stuck paying higher affiliate fees while being asked to take less in retransmission revenue from distributors. Sports leagues like the NFL have also raised questions, with one league official recently saying it was trying to “understand the value” of the platform.
Despite the large, and seemingly growing list of people who are opposed or have serious questions about the JV, Disney CEO Bob Iger struck a tone of quiet confidence when asked about possible obstructions earlier this month. In an interview with CNBC, Iger said the three companies are going ahead as though both the lawsuit by Fubo and government scrutiny will not stop them from bringing the JV to market.
It appears the time for testing that assertion is at hand. Iger, Murdoch, and Zaslav have until the end of the month to respond to this request for information from the highest levels of government, and if they comply observers will gain some much sought-after information about their JV streamer.
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