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The blockbuster Disney-Fubo deal reached earlier this year is now being formally reviewed by the U.S. Department of Justice for potential antitrust issues, according to sources and multiple reports.
The ESPN parent company agreed in January to acquire a controlling interest in Fubo and merge it with its own Hulu + Live TV streaming service. The pact, which included a $220 million payment by Disney to FuboTV and a $145 million loan scheduled for next year, helped resolve legal claims stemming from the introduction of the now-shuttered Venu Sports, the joint streaming service previously contemplated by ESPN, Fox, and Warner Bros. Discovery.
Three months later, however, potential anti-competition issues, particularly around sports streaming, are again surrounding Disney.
Even before the latest inquiry, however, several lawmakers viewed the proposed transaction suspiciously. Sen. Elizabeth Warren (D., Mass.), in particular, urged the DOJ to probe the deal. The agreement, if it goes through, would create a service with more than 6.2 million North American subscribers and the second-largest streaming-based television provider on the continent behind YouTube TV.
“Disney’s proposed acquisition of Fubo appears to allow Disney to simultaneously circumvent the lawsuit while gobbling up a competitor,” Warren wrote the department in February. “This proposed acquisition raises significant concerns under antitrust law, would give Disney increased market power and incentives to increase costs for viewers, and should be regarded as another data point in Disney’s history of anticompetitive behavior.”
Puck initially reported the pending DOJ action. None of the principals involved have commented, but Fubo is due to make its next quarterly earnings report on May 2, and Disney will do so on May 7.
