DOJ Investigates Disney-FuboTV Deal: Competition Concerns

Disney's FuboTV Deal Under DOJ Scrutiny

The U.S. Department of Justice has initiated an investigation into Disney’s agreement to acquire a controlling interest in FuboTV, as reported by Bloomberg. FuboTV is a live television streaming platform recognized for its comprehensive sports programming.

The core of the investigation centers on whether the transaction will lead to an undue consolidation of influence within the sports streaming sector.

Details of the Agreement

Disney revealed in January its intention to integrate its Hulu + Live TV service with FuboTV, with the goal of establishing the second-largest digital pay-TV provider in the United States, trailing only YouTube TV.

According to the terms outlined, Disney is slated to hold approximately 70% ownership of FuboTV following the completion of the merger.

Resolution of Prior Litigation

This agreement effectively resolves a legal challenge previously brought forth by FuboTV against Disney, Fox, and Warner Bros. Discovery. The lawsuit concerned their collaborative plans for a new sports streaming service known as Venu.

Shortly after the deal’s announcement, the development of Venu was discontinued. As part of the settlement, Disney and Fox agreed to compensate FuboTV with $220 million in exchange for the dismissal of the lawsuit.

Concerns Raised by Senator Warren

Bloomberg’s report follows a request made two months prior by Senator Elizabeth Warren. She called upon the DOJ to conduct a thorough review of the Disney-Fubo deal.

Senator Warren expressed concerns that the agreement may have been structured as a means for Disney to circumvent legal action and simultaneously eliminate a competitor.

She suggested the deal was a strategic move to acquire a rival company rather than a genuine business collaboration.