DOJ to Investigate Sports Streaming Super App, Implications for Consumers & Competitors

The proposed sports streaming mega-app may come under DOJ investigation, intending to scrutinize the forthcoming sports streaming platform jointly developed by ESPN, Warner Bros. Discovery, and Fox.

Fubo has criticized the sports streaming app, expressing concerns that it could potentially influence market dynamics in a manner detrimental to consumer interests.

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Facing DOJ Investigation

The U.S. Department of Justice plans to examine a sports streaming platform in the works by Walt Disney, Fox, and Warner Bros Discovery. The Verge reported that the concern is that it may negatively impact consumers, sports leagues, and competitors.

Seth Bloom, an antitrust lawyer at Bloom Strategic Counsel in Washington and former general counsel of the Senate Antitrust Subcommittee, expressed concern about the collaboration.

He highlighted potential competition and antitrust issues arising from major players in online sports distribution joining forces to launch a new service.

Bloom suggested that the DOJ would scrutinize the competitive effects of this collaboration and assess whether it might hinder other companies wishing to offer similar services from entering the market.

Following the announcement of the new joint venture, Bloomberg reported that Fubo, a sports-centric streaming platform, urged for careful examination.

In a statement released on February 7th, Fubo expressed concerns about the considerable market influence held by the media collaborators, purportedly overseeing 60% to 85% of all sports content.

Fubo raised concerns about the joint venture's objectives and its potential impact on fair competition, urging American consumers to take notice.

Robin Feldman, a professor at the University of California Law San Francisco, noted that the unveiling of the sports streaming service plan occurred concurrently with the Super Bowl, a period marked by difficulties for fans trying to watch prominent events.

She highlighted that while consumers might perceive the initiative as a unified platform offering convenience, the potential benefits must be balanced against the risks.

Feldman emphasized the importance of assessing whether the consolidation would restrict consumer options, potentially empowering a dominant platform to dictate pricing and access conditions for content seekers. These are paramount for competition regulators to scrutinize.

Joint Venture

Earlier this month, the three media giants announced a joint venture to launch a sports streaming service aimed at attracting younger audiences.

This collaboration leverages their extensive portfolio of professional and collegiate sports rights, covering a wide range of sports such as the NFL, NBA, MLB, FIFA World Cup, and college competitions.

The proposed app would offer access to various television sports networks, including ESPN, Fox Sports 1, and TNT, along with streamed content, albeit non-exclusively.

In addition, Disney intends to introduce an independent streaming edition of ESPN by the fall of 2025, integrating digital elements such as sports betting, fantasy sports, and e-commerce.

During the quarterly earnings call with investors, Disney CEO Bob Iger disclosed that the digital ESPN platform would establish "an unparalleled sports hub, distinct from any existing offerings in the market."