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Major Lawsuit Could END Historic Disney Merger

Lawsuit against Disney sports merger
Credit: Disney

Over the past few years, streaming has absolutely exploded in popularity. It seems that almost every major studio has its own streaming service, including the Walt Disney Company. Disney+ launched in late 2019, just a few months before the pandemic forced people to stay inside. While seeing a lot of initial success, Disney has been struggling a lot with Disney+, losing more than $11 billion.

But Disney+ is not the only major streaming platform that Disney owns. The company is also the home of ESPN+ and Hulu. But while Hulu is doing well, Disney CEO Bob Iger has been open about the struggles the company is having with ESPN+ and ESPN in general.

super bowl epsn travis kelce patrick mahomes kansas city chiefs san franciso 49ers

Credit: ESPN

Related: Major ESPN Scam Exposed! 

On February 7, Disney made a huge announcement that could really turn things around for its struggling sports app. Disney announced that it would be teaming up with Fox Sports and Warner Bros. to create the ultimate streaming app for sports fans. The app would allow subscribers to access sports content from all three companies, including the NBA, MLB, NFL, PGA, and more.

While Disney, Fox, and Warner Bros. were very happy about the news, one company was not, and they are now suing to stop the merger.

Disney Fox Warner sports team up walt disney company department of justice

Credit: ESPN

FuboTV is a streaming app that features a lot of live sports content. The company is arguing that the merger would violate antitrust laws by creating a massive sports streaming monopoly.

Per The Hollywood Reporter:

The suit accuses the media giants of leveraging their “iron grip on sports content to extract billions of dollars in supra-competitive profits,” leading to consumers pay more for highly popular sports content.

According to a release announcing the suit, other examples of behavior that may violate antitrust laws include the media companies charging Fubo content licensing rates that are as much as 50 percent higher than rates they charge other distributors.

FuboTV

Credit: Fubo

Related: Apple and Disney Consider Potential Merger

In a statement, FuboTV officials said that Disney, Fox, and Warner Bros. Discovery wanted to team up and engage in anticompetitive practices so they could hurt other companies and prevent new streaming platforms from existing.

And the company doesn’t appear to be wrong. The day after Disney’s joint venture announcement, FuboTV saw its stock plummet, dropping more than 25%.

ValueAct backs Bob Iger in Nelson Peltz fight

Credit: Apple TV+

It is also possible that FuboTV won’t be the only obstacle standing in the way of the Disney, Fox, and Warner Bros. merger. More than once, federal courts have blocked major mergers because they would violate antitrust laws. Antitrust laws are in place to prevent big companies from merging in order to create a monopoly and eliminate competition.

Warner Bros. Discovery and Fox have not made any statements about the lawsuit. Disney and ESPN refused to comment.

Do you think Disney should be allowed to merge with Fox and Warner Bros. to create a sports streaming app? Let us know in the comments!

About Krysten Swensen

A born and bred New England girl living the Disney life in Southern California. I love to read, to watch The Golden Girls, and love everything to do with Disney and Universal. I also love to share daily doses of Disney on my Disney Instagram @BrazzleDazzleDisney!

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