The U.S. Department of Justice (DOJ) will launch a review of a forthcoming streaming service operated by Fox Corporation, the Walt Disney Company’s ESPN and Warner Bros Discovery’s (WBD) TNT Sports, according to a report published last week.
On Friday, Bloomberg said the antitrust review will likely take place after Fox, ESPN and TNT Sports finalize their plans for the streaming service, which is expected to debut publicly later this year.
Earlier this month, the three companies announced tentative plans to develop and launch a direct-to-consumer streaming service that brings their sports-inclusive broadcast and cable channels to sports fans beyond the cable and satellite bundle. The service will include Fox, ABC, Fox Sports 1, ESPN, TBS, TNT, Tru TV and several college sports channels, but not general entertainment or news channels like Fox News, Fox Business, CNN, FX, HGTV or National Geographic.
The plan triggered a wave of criticism from cable and satellite industry groups, who complained that the streaming service amounted to an à la carte sports offering.
Cable and satellite companies have long sought terms with broadcasters that allow them to group certain channels or offer them on an individual basis, but have been hamstrung by antiquated carriage terms that require them to offer all channels owned by a broadcast or none at all.
In most cases, the terms reached with broadcasters also include specific conditions that require cable and satellite companies to offer certain channels like ESPN and CNN in their base subscription plans. Those terms cause base programming prices to rise for subscribers, cable companies say, even when customers don’t watch them.
Last week, the president of cable industry group ACA Connects welcomed a potential review of the broadcasters’ plans to offer their own sports streaming service beyond the bundle.
“This is exactly what should happen — it’s anticompetitive for the biggest media players to join forces while locking out traditional linear video providers, including our members from offering the same packages at the same prices,” ACA Connects President Grant Spellmeyer said. “Fans deserve a level playing field in the sports media landscape without the threat of these giants controlling the marketplace and jacking up prices.”
