Two Democratic members of the House of Representatives wrote a letter to the CEOs of The Walt Disney Co., Fox and Warner Bros. Discovery, asking more questions about their upcoming streaming sports joint venture while also expressing their “competition” concerns.
“As programmers, your companies exert tremendous influence over pricing across the live sports TV ecosystem,“ reads the missive, penned by Reps. Jerry Nadler (D-N.Y.), ranking member of the House Judiciary Committee, and Joaquin Castro (D-Texas).
“Upstream, programmers negotiate content licensing deals with sports leagues like the National Football League and the National Basketball Association for the media rights to their sports events,” the House members added. “Downstream, programmers determine the terms on which video distributors may license programmers’ sports channels. 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.”
Disney, Fox and Warner announced the new venture, in which they would bundle their collective linear sports channels, back in early February. It’s targeted to debut in the fall, and former Hulu and Apple executive Pete Distad was recently named CEO, but the JV (which goes by the internal codename "Raptor") still doesn't have an official name or a price.
But it has plenty of pushback, including an antitrust lawsuit filed by virtual MVPD operator Fubo. The U.S. Justice Department is also looking at the JV for antitrust reasons
The letter from Nadler and Castro said that the JV will control 80% of U.S. sports TV rights.
“To determine whether the JV will reduce competition and harm consumers, the members ask the companies to submit responses to a series of questions about the JV’s intent, pricing, licensing, and organizational structure,” the missive reads.
The Congress members said companies have until April 30 to respond to their letter via email and are instructed to copy the Justice Department in their replies.
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