August 07, 2024

Warren, Castro, Sanders Urge DOJ, FCC to Scrutinize New Sports Streaming Service From Fox, Disney, and Warner Bros.

“For consumers, this consolidation could lead to higher prices and fewer choices.”

Fox, Disney, and Warner Bros. control more than 80% of nationally broadcast sports content: “The market power of its three giant parent companies would enable it to discriminate against competitors and increase prices for consumers.”

Text of Letter (PDF)

Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.) and Representative Joaquin Castro (D-Texas), joined by U.S. Senator Bernie Sanders (I-VT), wrote to the United States Department of Justice (DOJ) and Federal Communications Commission (FCC), calling on the agencies to closely scrutinize the  proposed joint venture between FOX, Warner Bros. Discovery, and Disney subsidiary ESPN that would create a new streaming service named Venu Sports (Venu).

“This massive new sports streaming company would be poised to control more than 80% of nationally broadcast sports and more than half of all national sports content, putting it in a position to exercise monopoly power over televised sports,” wrote the lawmakers.  “The market power of its three giant parent companies would enable it to discriminate against competitors and increase prices for consumers.”

The cost of streaming services already rose by nearly 25% in 2023 as a small group of companies capture viewership, bundle content, and raise prices to maximize profits. 44% of viewers in the U.S. also report that their streaming subscription costs increased over the last year amidst increased bundling and consolidation. 

Venu would be poised to continue this trend by consolidating the sports programming of the second, fifth, and ninth highest revenue media companies in the world. Under the joint venture, other streaming platforms would have to negotiate with Fox, Disney, and Warner Bros. for access to major sports licensing rights while simultaneously competing with them to offer a competitive sports streaming service.  Fox, Disney, and Warner Bros. would have a financial incentive to preference Venu in negotiations with competitors, including by continuing to bundle sports channels with other less popular programming and effectively requiring competitors to buy the entire bundle, preventing them from offering cheaper deals to consumers. 

In fact, the lawmakers point out that Disney has already been accused of this behavior with its streaming platform Hulu, using “its significant licensing leverage to set a price floor and prevent competitors from offering cheaper, competitive bundles to consumers.”

“Using its extensive control of sports licensing rights, Fox, Disney, and Warner Bros. would be able to exert joint control over live sports from distribution through broadcast,” wrote the lawmakers. “The risks of corporate consolidation that Venu promises will likely be borne by American sports viewers.”

Although Venu is framed as a joint venture rather than a merger, its consolidation of the live sports market could raise concerns under both antitrust and telecommunications laws aimed at preventing excessive consolidation and protecting public interest.

“The description of this deal as a ‘joint venture’ should not prevent antitrust and telecommunications regulators from giving it the scrutiny it deserves,” wrote the lawmakers. “DOJ and FCC should closely scrutinize this transaction and take immediate action to block it if it violates antitrust law, or if it does not serve the ‘public interest, convenience, and necessity.’” 

Senator Warren has long fought to crack down on corporate consolidation that threatens consumers and raises prices: 

  • In July 2024, Senators Warren, Klobuchar, Murphy, Sanders, Booker, and Blumenthal wrote a letter to the Department of Justice and Federal Communications Commission, urging them to scrutinize T-Mobile’s proposed acquisition of UScellular.
  • In July 2024, Senator Warren and Representatives Mark Pocan (D-Wis.) and John Garamendi (D-Calif.) urged the Department of Defense (DoD), FTC, and DOJ to review TransDigm Group Inc.’s acquisitions of two specialized aerospace contractors to prevent price gouging.
  • In June 2024, Senator Warren wrote to DOJ, FTC, and the Department of Health and Human Services (HHS), calling out high health care costs due to vertically-integrated insurers, private equity companies, and pharmaceutical companies that are driving health care consolidation.
  • In June 2024, Senators Warren and Markey (D-Mass.) introduced the Corporate Crimes Against Health Care Act of 2024 to root out corporate greed and private equity abuse in the health care system.
  • In May 2024, chairing a hearing of the Senate Banking, Housing, and Urban Affairs Committee Subcommittee on Economic Policy, Senator Warren highlighted the impact of concentration in the food industry and its impact on prices, product, and consumer choice.
  • In May 2024, Senator Warren and Senator Josh Hawley (R-Mo.) introduced the bipartisan Airport Gate Competition Act, which would increase competition in the airline industry and lower prices for consumers by increasing the number of common use gates in airports.
  • In March 2024, Senator Warren and Representative Mary Gay Scanlon (D-Penn.) led a group of 14 lawmakers in urging the FTC to revive enforcement of the Robinson Patman Act, a critical tool to promote fair competition in the food industry.
  • In March 2024, Senators Warren and Klobuchar led 26 lawmakers in urging the leadership of the House and Senate Appropriations Committees urging them to strike parts of the Commerce, Science, and Justice (CJS) appropriations bill that undercut DOJ’s ability to block anticompetitive mergers.
  • In February 2024, Senator Warren urged FTC to closely scrutinize Choice Hotels’ attempted hostile takeover of Wyndham Hotels & Resorts, which would further consolidate the hotel market and create the largest branded hotel chain in the United States.
  • In February 2024, Senator Warren delivered the keynote address at RemedyFest, where she called out Big Tech for their anti-competitive tactics that have led to market consolidation and record profits.
  • In February 2024, Senator Warren and 12 other lawmakers called on regulators to block the Capital One-Discover Merger.
  • In December 2023, Senator Warren led 6 senators in a letter to Acting Comptroller of the Currency Michael Hsu, calling on OCC to allow states to move forward with their efforts to protect consumers from harmful bank practices. The senators criticized the OCC for overstepping its preemption authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which the agency is abusing to block tough, state-level consumer protections.
  • In November 2023, Senators Warren and Blumenthal called out U.S. Anesthesia Partners’ (USAP) monopolistic business model and use of restrictive non-compete agreements that have reduced patients’ quality of care, increased prices, and suppressed workers’ wages.
  • In October 2023, Senator Warren and Representative Pramila Jayapal (D-Wash.) urged DOJ and FTC to carefully scrutinize UnitedHealth Group’s pending acquisition of Amedisys; and urged the agencies to scrutinize similar deals, reject behavioral or structural remedies, and oppose any health care acquisition that would threaten competition, increase prices, and reduce quality of care.
  • In September 2023, Senator Warren and Representative Becca Balint (D-Vt.), along with a bicameral group of lawmakers, submitted a public comment to the FTC and DOJ in support of the agencies’ proposed merger guidelines, endorsing the agencies’ reading of antitrust law, praising the guidelines as necessary to prevent harm to workers, consumers, and small businesses.
  • In August 2023, chairing a hearing of the Senate Banking, Housing, and Urban Affairs Committee Subcommittee on Economic Policy, Senator Warren highlighted the need for regulators to implement the strongest version of bank merger review guidelines in order to ensure stability in the financial system. 
  • In June 2023, Senator Warren sent a letter to Assistant Attorney General Jonathan Kanter, Federal Deposit Investment Corporation (FDIC) Chairman Gruenberg, Acting Comptroller of the Currency Hsu, Federal Reserve Vice Chair for Supervision Michael Barr, and Treasury Secretary Janet Yellen, urging regulators to promote greater competition in the banking sector by toughening their stances on bank mergers and strengthening bank merger review guidelines.
  • In May 2023, at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren questioned Acting Comptroller Hsu on his decision to approve JPMorgan Chase’s purchase of First Republic Bank after its collapse. This merger allowed a large, poorly supervised bank to be swallowed by America’s largest bank, making it $200 billion larger than it was before.
  • In May 2023, Senator Warren sent a letter to Acting Comptroller Hsu and FDIC Chair Gruenberg, questioning the terms of the sale of First Republic Bank to JP Morgan Chase and the rationale behind the OCC and FDIC’s approval of the deal. 
  • In December 2022, Senators Warren and Tina Smith (D-Minn.) sent letters to three key banking regulators: the Federal Reserve, FDIC, and the OCC, raising concerns about the ties between the banking industry and crypto firms following FTX’s bankruptcy. The senators asked each regulator how they assessed the banking system’s exposure to crypto risks. 
  • In December 2022, Senator Warren and Representative Ilhan Omar (D-Minn.) sent a letter to the heads of all U.S. banking regulators, including Acting Comptroller Hsu, calling on them to improve banking access for immigrant communities and communities of color.  
  • In August 2022, Senators Warren, Dick Durbin (D-Ill.), Whitehouse, and Bernie Sanders (I-Vt.) sent a letter to the OCC, calling on it to rescind the previously issued cryptocurrency guidance and replace it with more comprehensive guidance, in coordination with other prudential regulators. 

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