Recently, Disney, Fox, and Warner Bros Discovery announced that they would be coming together to launch a new sports streaming giant that would bring together over 10 sports channels into a single streaming service.
Since that announcement, we have already heard complaints and concerns from other streaming TV services, as well as local network operators. Now, we’re hearing concerns from Congress, with US Representative Jerry Nadler (D-NY) and Rep. Joaquin Castro (D-TX) who have sent a letter to the three companies, asking questions about the service.
The letter says that 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.”
These are the same concerns that we’ve heard from Fubo recently, who are actually suing Disney, Fox, and Warner Bros Discovery to stop the new sports service.
The new joint venture sounds like a good idea, but it could be ultimately terrible for consumers
While this joint venture sounds excellent, especially with so many people cutting the cord these days and most companies wanting their own streaming service, it ultimately is going to be a terrible thing for consumers. With the three biggest sports networks basically combining into a single app, it means that they can effectively price their competitors like CBS Sports (Paramount Plus) and NBC Sports (Peacock) out of the market. This is one of the very many points that the Congressmen bring up in their letter.
We’ve seen in the past that when a couple of companies own everything, it ultimately hurts the consumer the most. Having more competition is good, as it forces companies to be more competitive and keep prices lower. While we do expect to see a lot of consolidation in the streaming market over the next few years, this is something that is going to face a lot of legal issues from partners as well as Congress.