Vexed by a Fubo antitrust lawsuit in its effort to launch streaming joint venture Venu Sports, Disney last month purchased a 70% stake in the virtual MVPD, ending litigation, and shut down its JV.
But according to Sen. Elizabeth Warren (D-Mass.), Disney has simply raised even more antitrust concerns.
In a letter to the U.S. Justice Department sent last week, Warren wrote, “Disney’s proposed acquisition of Fubo appears to allow Disney to simultaneously circumvent the lawsuit while gobbling up a competitor.”
She added that the acquisition “raises significant concerns under antitrust law, would give Disney increased market power and incentives to increase costs for viewers, and should be regarded as another data point in Disney’s history of anticompetitive behavior.”
The deal with Fubo also puts Disney’s existing vMPVD, Hulu + Live TV, under the operational control of Fubo management. Disney, Warren noted, would control around 35% of the vMVPD market, and around 27% of program licensing rights for U.S. sporting events, including those associated with the NFL, NBA, MLB and NHL.
The merger would limit competition in the already concentrated vMVPD market, Warren asserts.
“Even if Fubo and Hulu + Live TV are offered as separate services (as the initial plan suggests), their common ownership virtually eliminates any possibility of true competition. FuboTV and Hulu + Live TV would both be owned by Disney, and would both be governed by the same board of directors ‘with the majority [of directors] appointed by Disney.’ Under this ownership structure, neither Disney nor the operating board of directors have a profit incentive for Fubo and Hulu + Live TV to compete.”
Disney, meanwhile, would be incentivized to feather its own nest, Warren suggested.
“Disney’s acquisition of Fubo may also limit access to products that rivals rely on to compete, which could also threaten competition in violation of antitrust law,” she added. “If Disney owns Fubo, it will be financially incentivized to maximize subscriptions to that platform … Given Disney’s control over sports rights, it may seek to limit competitors’ access to those rights through higher carriage costs or ‘bundling.’”
Warren (committee background outlined here) has a lengthy history for weighing in on deals in the technology, media and telecom sphere. Notably, she called on the FCC to block Standard General’s proposed $8.6 billion acquisition of Tegna two years ago. And the regulatory pushback ultimately convinced Standard General to scrap the deal.
Just how influential the Democratic Senator’s pleas will be for a DOJ now under the control of U.S. Attorney General Pam Bondi, a recent Trump appointee, is certainly questionable. Then again, Disney has over the past year bumped heads in other areas with lawmakers on the right, so it’s difficult to speculate as to how regulators will react to this deal.
Notably, antitrust concerns over Disney’s settlement with Fubo have been percolating in other places. Last month, for instance, a Fubo subscriber proposed a class-action suit against Disney over the deal in a New York federal court. Disney’s ownership of ESPN, the subscriber said, “enables it to extract monopoly rents” from vMVPD companies.
Disney, Fox and Warner Bros. Discovery announced a year ago the launch of a streaming joint venture, Venu Sports, that would bundle all of the parties’ linear sports networks, including ESPN, TNT and Fox Sports.
Fubo sued the JV, alleging among other contentions that the program suppliers had resisted the pleas among pay TV companies for years to let them create similar “genre-based” skinny bundles of networks.
Back in August, a New York federal court sided with Fubo’s antitrust arguments, issuing a rare preliminary injunction that temporarily halted Venu Sports’ launch. The case was set to go to a trial hearing in October 2025.
Then last month Fubo and the Venu principals settled the suit. Debt-laden Fubo received a $220 million cash payment from all three defendants, as well as a $145 million term loan from Disney. In addition to dropping the suit, Fubo relinquished 70% control of itself to Disney.