Disney’s surprising move in January to acquire majority control of Fubo not only resolved one source of antitrust litigation but also raised new antitrust concerns. Senator Elizabeth Warren (D-MA) recently highlighted these issues in a letter to the Department of Justice’s antitrust division.
The January deal was accompanied by a settlement of Fubo’s lawsuit aimed at blocking the Disney-Fox-Warner Bros. Discovery joint venture, Venu Sports. However, the companies abandoned the Venu plan shortly after, following continued opposition from DirectTV, Dish, and others. (DirecTV then launched their own sports skinny bundle, MySports, but it differs significantly.) Despite this, concerns remain regarding potential antitrust violations arising from Disney’s acquisition of another distributor like Fubo, which holds substantial content, including linear channels like ESPN.)
Warren articulated these concerns in her letter, sent to DOJ antitrust division interim head Omeed Assefi and copying Gail Slater, who has been nominated by President Trump to lead the division as assistant attorney general. The letter was first reported by Gene Maddaus of Variety and later released on Warren’s Senate site. It emphasizes how this acquisition would place Fubo’s estimated 1.5 million subscribers (according to a September nScreenMedia report), equating to 9% of the vMVPD market, under the same umbrella as Hulu+Live TV, which has 4.4 million subscribers, or 26%:
Disney’s proposed acquisition of Fubo appears to allow Disney to circumvent ongoing lawsuits while absorbing a competitor. This acquisition raises significant antitrust law concerns, potentially increasing Disney’s market power and viewer costs, highlighting a trend of anticompetitive behavior. I urge the DOJ to scrutinize this deal closely.
This proposed deal is closely tied to Disney’s ambitions to dominate the sports streaming market through Venu Sports.
Furthermore, Disney’s acquisition of Fubo could diminish competition in the vMVPD [virtual multichannel video programming distributor] market, which is already highly concentrated. Extreme price hikes from programmers like Disney have forced competitors such as Playstation Vue (closed in 2020), TVision (2021), and Duo (2024) to shut down, resulting in a market controlled by just four firms that account for over 90% of subscriptions globally. Domestic figures suggest similar consolidation.
The DOJ employs the Herfindahl-Hirschman Index (HHI) to gauge market concentration. An HHI exceeding 1,800 signifies a highly concentrated market. Even considering potential service overlap, estimates indicate an HHI above 3,000. Should Disney acquire Fubo, the estimated HHI may rise to around 3,500, which, according to DOJ merger guidelines, suggests that an increase of over 100 points in a concentrated market could be deemed presumptively illegal under antitrust law.
The last statement deserves attention; “presumptively illegal” means that while a merger or acquisition may not be outright blocked, companies bear a heavier burden in justifying it, potentially increasing the likelihood of conditional approvals. This scenario occurred with Disney’s purchase of various Fox assets, where a 2018 agreement with the DOJ saw Disney divest Fox’s regional sports networks (now primarily owned by creditors following bankruptcy) in exchange for permission to acquire Fox’s TV and movie studios.
It’s also significant that the DOJ filed a brief in November supporting Fubo’s lawsuit against Venu, although focused on a different matter. While Disney/Fox/WBD’s bundle of sports content and Disney’s acquisition of a vMVPD are interrelated topics, they are not identical. Disney may argue they plan to keep Fubo as a separate entity, though its long-term viability is uncertain. Therefore, it’s unclear if the DOJ will encounter similar challenges with this acquisition as it did with Venu Sports.
Since last fall, there’s also been a change in federal administration. Analysts believe President Donald Trump’s administration is more amenable to mergers and acquisitions than former president Joe Biden’s administration. Consequently, opposition from Warren may have less impact now that her party does not control the presidency. Specifically, a Reuters analysis suggested that Slater may adopt a more permissive stance towards transactions facing minimal competition concerns:
The good news for business is that Slater’s DOJ will likely take a more lenient approach to deals with limited competitive implications. Previously, the DOJ aimed to block deals rather than seek temporary solutions to mitigate competition concerns.
Slater seems more receptive to consent decrees to counteract competitive harm arising from mergers, emphasizing that, if handled properly, remedies can eliminate any competitive issues, enabling transactions to proceed in a pro-consumer, pro-competitive way.
This shift may yield two primary outcomes. First, for the few deals with substantial opposition, parties might reach settlements that avert outright blocks. Second, the DOJ’s readiness to consider remedies like divestitures or conduct commitments may encourage dealmakers to pursue transactions more readily, potentially leading to a surge in merger and acquisition activity.
We will observe the level of antitrust scrutiny the DOJ applies to the Disney-Fubo acquisition, which might face no obstacles or could lead to a negotiated consent decree with minimal impact. However, there remains a possibility of opposition to this deal, as evidenced by Warren’s public letter, indicating prominent political resistance to this specific Disney acquisition.
