Senators Elizabeth Warren and Bernie Sanders and U.S. House members Pat Ryan and Joaquin Castro—three Democrats and an independent—have jointly written a letter to the leaders of Disney, ESPN, MLB, and the NFL about “serious concerns” regarding ESPN’s planned new partnerships with the sports leagues, Front Office Sports has learned.
Last month, ESPN announced its intention to acquire NFL Network in exchange for a 10 percent stake in ESPN, part of a wide-ranging partnership with the league that also includes linear distribution and trademark rights for NFL RedZone. ESPN has separately reached an agreement in principle to license the MLB.TV streaming streaming service.
The senators explained their concerns to Disney CEO Bob Iger, ESPN chairman Jimmy Pitaro, NFL commissioner Roger Goodell, and MLB commissioner Rob Manfred. You can read the letter in its entirety here.
“The agreements between ESPN, the NFL, and Major League Baseball (MLB) that have recently become public raise serious concerns and could entrench ESPN’s dominance over competitors in sports distribution,” the letter said. “As prices rise across the board, including for cable and satellite TV and streaming services, sports fans should not be forced to pay more or jump through more hoops to watch their favorite team. We are concerned that these new deals could hurt consumers by disadvantaging competitors, limiting choices, raising prices for viewers, and creating potential conflicts of interest.”
ESPN’s deal with the NFL still must pass regulatory muster. Ironically, initial speculation involved President Donald Trump possibly holding up the deal, and Trump’s Justice Department is reportedly planning a “substantive review” of the agreement. Now more potential pressure on the deal is coming from the other side of the aisle.
The letter says that the NFL’s equity stake in ESPN would give the league “an incentive to grant ESPN anticompetitive preferential treatment over other distribution partners” and that it “would likely harm ESPN’s competitors, who could find it challenging to compete, ultimately resulting in higher prices and fewer choices for viewers if disadvantaged competitors subsequently fail.”
The letter further alleges that ESPN’s stated willingness to do deals for other leagues to obtain an equity stake in the network lays out a “blueprint for future consolidation and consumer harm.”
The NFL, through its stake in Skydance, already owns an equity stake in CBS, another of its rights partners. (Front Office Sports’s primary investor, RedBird IMI, is part of RedBird Capital, which is also an investor in CBS’s parent company Paramount.)
The letter also says that a deal with the NFL could make ESPN’s rivals further struggle to compete with its distribution, that more people watching the NFL on RedZone would make viewers less likely to watch games on other networks—CBS and Fox, which aren’t named in the letter—that the deal could impact ESPN’s news coverage, and that merging the NFL’s and ESPN’s fantasy football operations would result in less competition.
Goodell assured ESPN employees that the league would not get involved with their journalism, FOS previously reported.
On the MLB front, the senators worried that the aforementioned deal in principle “could make it more difficult and more expensive for current cable or other linear MLB.TV subscribers to watch games.”
The senators raised 12 questions for Disney, ESPN, the NFL, and MLB related to these concerns, including how the NFL and ESPN would “safeguard” against giving each other preferential treatment, and whether MLB.TV would remain available as a standalone product vs. requiring a subscription to ESPN.
Spokespeople for ESPN, the NFL, and MLB declined to comment for this story.
