Venu Sports from Disney, Warner Bros. Discovery, & Fox Will Face More Congressional Scrutiny Over Possibly Driving Up the Price of TV





Earlier this year Disney, Fox, and Warner Bros. Discovery announced they would launch a streaming service to offer live sports without non-sports channels called Venu Sports. This was quickly met with a lawsuit from Fubo that asked the judge to block the service from launching.

Following that came a letter from several members of Congress demanding answers about the price and how this will impact sports television. In response, Fubo is getting help from DISH, DIRECTV, Newsmax, and others to get Congress to investigate Disney, Fox, and Warner Bros. Discovery’s new streaming service. The argument here is this new service will give these companies too much power to dominate sports TV as they block other services like Fubo’s hopes to launch a similar service.

In the letter, the signees argued that the “recent developments in the pay-TV market—including the programming giants’ new joint venture (“JV”), a streaming TV service that would control 80% of national live sports broadcasts—raise serious competition concerns that call for Congress’s immediate oversight.”

Now Congress has met with representatives from Venu Sports according to The Wrap, and they want more answers. According to the report, a follow-up letter will be sent this week after the meeting failed to address all concerns from Congress.

The question now is will Congress and the DOJ follow through on earlier reports of a formal investigation into Venu Sports. We will have to wait and see.

Here is the full letter sent to Congress from DISH, DIRECTV, and Fubo asking for an investigation:

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 (“JV”), a streaming TV service that would control 80% of national live sports
broadcasts 1 – 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). 2 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.

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