Lawmakers are ramping up scrutiny of the streaming sports bundle Venu, with the aim of blocking the joint venture involving Disney, Fox, and Warner Bros. Discovery. Senators Elizabeth Warren, Bernie Sanders, and Representative Joaquin Castro have called on the Justice Department and Federal Communications Commission to investigate the platform and prevent the consolidation of sports licensing rights that could lead to price hikes in the market for live sports.
The streaming bundle, set to launch in the fall at $42.99 per month, will offer subscribers access to live, linear channels including ESPN, Fox, ABC, TNT, and TBS, as well as ESPN+. With rights to major sports leagues like the NFL, NBA, MLB, and NHL, as well as college sports and pro tennis, Venu aims to compete against other streaming services like YouTubeTV and Fubo.
However, Fubo has filed a lawsuit against the media giants over the joint venture, alleging that they are forcing the platform to carry expensive non-sports channels as a condition of licensing sports rights, in an effort to stifle competition. The lawmakers echo these concerns, stating that Venu’s bundling of less desirable channels with sports content could harm competition in the market.
The joint venture could result in higher prices for consumers, as it eliminates incentives for companies to compete against each other for licensing deals. Studies cited in the letter from lawmakers show that streaming costs have increased over the past year due to bundling and consolidation, with major platforms seeing a nearly 25% rise in prices in 2023. By consolidating over half of all major U.S. sports events onto one service, Disney, Fox, and WBD could potentially set a price floor and limit viewing options for consumers.
In addition to antitrust concerns, the lawmakers argue that the joint venture violates FCC rules regarding ownership of broadcast stations reaching more than 39% of households. With Disney and Fox owning multiple broadcast stations and Venu controlling the distribution of over 80% of nationally broadcast sports games, the venture could have significant control over the sports streaming market.
Furthermore, the bundle does not include CBS Sports or NBC Sports, meaning that some NFL and college games will not be available on the service. Additionally, with new deals between the NBA and NBC and Amazon, Venu could potentially lose half of its pro basketball games.
Currently, a federal judge is hearing arguments in the lawsuit initiated by Fubo, to determine whether a preliminary injunction should be issued to block Venu. The outcome of this case could have significant implications for the future of sports streaming and competition in the market.
