The US Department of Justice (DoJ) has initiated an antitrust investigation into the recent acquisition of sports-focused streaming service Fubo by media giant Disney. The deal, which was announced in January, has raised significant antitrust concerns among competitors and lawmakers alike.
The merger between Disney and Fubo is under scrutiny due to potential competition reduction in the live internet TV services market. Dish and DirecTV have both cited these issues in their complaints about the move. According to reports, both Disney and Fubo are already responding to information requests from the DoJ and preparing for a possible challenge from the Trump administration.
Under this agreement, Disney plans to merge its Hulu + Live TV business with Fubo's services, becoming a majority owner of 70% in the resulting company while leaving 30% ownership to Fubo shareholders.
Settlements & litigations
In conjunction with this transaction, all litigation related to Venu Sports - a joint venture sports streaming platform planned by ESPN, Fox, and Warner Bros. Discovery (WBD) - was settled between Fubo, Disney/ESPN as well as Fox/WBD. This settlement came after Fubo filed a lawsuit against these companies seeking blocking of Venu Sports' launch which was subsequently scrapped days after Disney's acquisition announcement.
Critics argue that merging Hulu + Live TV business with Fubo could significantly reduce competition while increasing marketplace power for Disney. Senator Elizabeth Warren voiced her concerns stating that this acquisition "appears to allow Disney to simultaneously circumvent the lawsuit while gobbling up a competitor."
She further added that such an acquisition raises significant concerns under antitrust law as it would give increased market power to Disney along with incentives for cost increase for viewers.
Impact on subscribers & future services
The combined entity will have over 6.2 million subscribers in North America, allowing customers to stream live broadcast and cable networks on their connected devices. As part of the deal, Disney will enter into a new carriage agreement with Fubo to create a sports and broadcast service featuring Disney’s premier sports and broadcast networks.
Hulu + Live TV will continue to be streamed in the Hulu app and offered as part of the bundle with Hulu, Disney+, and ESPN+. The combined company will negotiate carriage agreements independently from Disney for both Hulu + Live TV and Fubo services.
While this merger promises enhanced streaming services for viewers, it also raises serious antitrust concerns that could potentially reshape the landscape of live internet TV services market. The outcome of DoJ's investigation is eagerly awaited by all stakeholders involved.
