The impending sports-centric streaming joint venture from Disney/ESPN, Fox, and Warner Bros. Discovery, affectionately known as “Spulu,” has gotten the attention of Congress.
On Wednesday, Rep. Jerrold Nadler (D.-NY) and Rep. Joaquin Castro (D.-Texas) sent a letter to the CEOs of those companies requesting answers about concerns over the competitive implications of the service.
Nadler is the ranking member of the House Judiciary Committee.
“As programmers, your companies exert tremendous influence over pricing across the live sports TV ecosystem,” Nadler and Castro said in their letter to Disney’s Bob Iger, Fox’s Lachlan Murdoch, and Warner Bros. Discovery’s David Zaslav.
The letter goes on to say the 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.”
Nadler and Castro requested answers by April 30 and asked that they “please copy the Department of Justice in your response.”
According to Variety, their list of questions includes: “Will the Joint Venture Partners implement provisions to prevent anti-competitive sharing of pricing or other competitively sensitive information among each other?”
The three corporations announced the unique partnership in February, saying they wanted to debut the sports-centric bundle in the fall of 2024. The joint venture service will bundle ESPN+ and each of the companies’ linear TV networks with sports programming, which includes ABC, ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNews, Fox, FS1, FS2, Big Ten Network, TNT, TBS, and truTV. Pricing for the service has yet to be announced.
Pay-TV provider Fubo filed a federal lawsuit in February to block the service’s launch, alleging that it violates antitrust laws. Fubo CEO David Gandler called the venture an “attempt to monopolize the sports streaming industry and eliminate competition” and added that the companies have “engaged in a years-long campaign to block Fubo’s innovative sports-first streaming business resulting in significant harm to both Fubo and consumers.”
Per Bloomberg, the Justice Department has been planning to review the venture over possible consumer harm and antitrust concerns.
Both WBD chief David Zaslav and Fox CEO Lachlan Murdoch have positioned the service as targeting cord-cutters and nevers instead of targeting current cable or streaming subscribers.
