DOJ Should Act Against Sports Super Streamer Monopoly
There might be a sports fan somewhere in this great country of ours who believes that watching sports is inexpensive and hassle-free. We just never met one. Instead, most sports fans must buy TV packages they don’t want, pay inflated prices, navigate blackout policies that make no sense, or subscribe to more services than they need, just to follow the home team. Unfortunately, it could get a lot worse.
Three of the biggest media companies in the world –The Walt Disney Company, Fox Corp., and Warner Bros. Discovery– recently announced a new sports streaming service, named Venu, that they claim would better serve fans by offering a “skinny” bundle of basketball, football, baseball, hockey, and other sporting events, without forcing fans to buy any non-sports programming. They argue that this service will provide consumers more options and be good for competition in the crowded tv streaming marketplace.
At first, it did sound pretty good–rather than subscribe to different streaming apps owned by these three companies, fans could just buy one service for about $45 a month. But like everything else in the sports industrial complex, after about thirty seconds, you realize that this is just another way to squeeze fans for every penny. By combining all the sports streaming services of these three media titans, the joint venture would control a staggering 80 percent of U.S. live sports distribution rights. Such market power means, absent any real competition, that the same three companies which already control most of your media diet now could name their price if you want to watch the games you love.
One independent competitor in the sports streaming space, FuboTV, is fighting back by suing the big media companies for allegedly violating antitrust laws. In our role as advocates for sports fans, we support Fubo’s fight. Our non-profit, Sports Fans Coalition, along with American Economic Liberties Project, Electronic Frontier Foundation, Open Market Institute, and Public Knowledge, filed an amicus brief in the case, explaining that the proposed venture would eliminate competition among its big three media companies in several critical markets, including streaming live sports, while making it harder for independent distributors, like Fubo, to offer a competing sports bundle. Without strong competition, Disney, Fox, and Warner would laugh all the way to the bank as they raise prices, reduce options for fans, or show any of the other classic anti-competitive behaviors typical of dominant firms.
Underscoring Fubo’s strong legal claims and our arguments in the amicus brief, on August 16th a federal judge in New York granted Fubo’s request for a preliminary injunction, meaning that Venu is prohibited from launching unless they win on appeal or prevail when the case goes to trial. While this was welcome news, the fight is only just beginning.
The Department of Justice Antitrust Division, fresh off its big win against Google, should take a hard look at this latest digital domination disaster. Its own merger guidelines say that competition benefits consumers because companies that compete with each other tend to offer lower prices and more innovative services. Those guidelines say that joint ventures between companies, not just mergers, can cause anticompetitive effects. DOJ’s merger guidelines also warn that a dominant firm not only can charge consumers higher prices, it can demand lower prices from workers and suppliers. In this case, the Venu venture effectively reduces the number of bidders for sports content, meaning that niche sports, like pickleball, ultimate frisbee, and chess boxing, could get crushed.
DOJ should heed its own guidelines and act swiftly to stop big media’s sports streaming scam. It needs to protect the nascent market of skinny sports streaming bundles and not hand that market over to a fat monopoly. The DOJ’s intervention can prevent irreparable damage and ensure a level playing field. To borrow a chant from football fans across the country, “Block that Deal!”
