The heat is turning up for ESPN, Warner Bros. Discovery, and Fox over their joint streaming venture Venu Sports.
The company is already embroiled in a high stakes lawsuit that just got underway in federal court as competitor Fubo is challenging the joint venture on antitrust grounds. In April, Democratic representatives Jerry Nadler and Joaquin Castro sent a letter to the three companies involved asking serious questions about their own potential antitrust concerns. And now, influential Democratic senators Bernie Sanders and Elizabeth Warren are getting involved.
Sanders, Warren, and Castro have urged the Department of Justice to investigate the launch of Venu Sports over antitrust concerns as well as telecommunications laws and regulations.
Via The Athletic:
Sens. Elizabeth Warren and Bernie Sanders and Rep. Joaquin Castro have sent a letter to the Department of Justice asking it to investigate and potentially prevent Disney, Fox and Warner Bros’ from starting a joint venture that will combine the resources of ESPN, Fox Sports and TNT Sports in a direct-to-consumer streaming service called Venu Sports.
In the letter, obtained by The Athletic, the three Democrats urged the Department of Justice to examine Venu Sports “and oppose it if it violates antitrust or telecommunications laws or regulations.” They also think that Venu being described as a joint venture should not prevent it from scrutiny.
Venu Sports is being priced at $42.99 per month and is set for a yet to be determined fall launch. Already, the streaming platform is being backed into a corner with pressure coming from both sides.
On one end is the pressures of the streaming revolution and these media giants trying to find a way to replace lost cable revenue in the era of cord cutting. ESPN, WBD, and Fox Sports are all having to reinvent their business models and revenue streams overnight. And their high-level view is that combining their assets together are a way to break through and get subscribers that aren’t already pledged to a comprehensive streaming service to jump on board. There’s also the reality that they could win subscribers from other platforms (hence the Fubo lawsuit) given their leaner and cheaper offering.
But at the same time, Venu is arguing in federal court, and surely will make the case to Congress and the DOJ, that they aren’t a sports fan’s streaming paradise. All they are doing is trying to target a very specific consumer base they are touting as “cord nevers.” They don’t have the NFL inventory that CBS and NBC have as you would need Paramount+ and Peacock to pick up those games. They also just lost out on TNT’s huge NBA rights that will move to NBC and Peacock next year.
Feeling that squeeze, Venu Sports finds itself in a weird position trying to argue that they are a great option and great value for sports fans… but not too great as to bring the DOJ into the mix. And at the moment, that seems like a tough argument to win.
