Disney, Warner Bros. Discovery (WBD), and Fox are poised for heightened Congressional scrutiny following a meeting on May 31 that failed to address lawmakers' concerns regarding the Venu Sports bundle. TheWrap reported that Congressmen Jerry Nadler and Joaquin Castro are preparing to send a follow-up letter with additional questions to the three media giants as early as this week.
This development follows an April 16 letter from Nadler and Castro to Disney CEO Bob Iger, WBD CEO David Zaslav, and Fox CEO Lachlan Murdoch, which included 19 questions regarding the new venture. The lawmakers requested responses by April 30, highlighting the companies' significant influence over live sports TV pricing and expressing concerns that the joint venture could lead to higher prices for consumers and less favorable licensing terms for sports leagues and video distributors.
“As programmers, your companies exert tremendous influence over pricing across the live sports TV ecosystem,” the letter states. “As a result, the Joint Venture raises questions about how this new offering would affect access, competition and choice in the sports streaming market. 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.”
Venu Sports, slated to launch this fall pending regulatory approval, will provide access to content from various linear sports networks, including ESPN, FOX, and TNT, among others. The service will feature content from major sports leagues and events and will offer a bundling option with Disney+, Hulu, and Max. Disney, Fox, and WBD will each hold a one-third stake in the venture and will license their sports content on a non-exclusive basis.
Former Hulu and Apple executive Pete Distad will serve as Venu's CEO, overseeing an independent management team based in Los Angeles. Analysts have estimated that Venu's pricing could range from $35 to $50 per month, with Fox CEO Lachlan Murdoch suggesting it would be at the higher end of the spectrum. Venu aims to attract 5 million subscribers within its first five years, according to Murdoch.
In addition to legislative concerns, Fubo has filed an antitrust lawsuit seeking to block Venu, alleging it is part of a long-standing pattern of anticompetitive practices by Disney, WBD, and Fox. A preliminary injunction hearing for the case is scheduled for August 7.
Several entities, including Fubo, Dish Network, DirecTV, and advocacy groups, have cosigned a letter urging Congress to hold hearings on the future of competition in the pay-TV market. The letter argues that Venu raises "serious competition concerns" and calls for "immediate oversight" from lawmakers.
Related News
