Rafael Henrique/SOPA Images/Sipa USA via AP
One of the shoes I’m expecting to drop in the new year is the further consolidation of Hollywood. Cable is dead, streaming is still not profitable, and the major players have been circling one another for years. The change in power in Washington will create more space for mergers, and with media in particular sucking up to Donald Trump, he may not intervene the way he did with the AT&T/Time Warner deal.
That sets the stage for an audacious announcement yesterday that ends a private antitrust lawsuit against the biggest studios by simply buying the plaintiff.
Disney announced Monday morning that it will buy out sports-forward streaming TV service FuboTV, which sets the stage for a new joint venture, Venu Sports, combining the sports programming of Disney, Fox, and Warner Bros. Discovery. That bundle would deliver nearly all baseball and hockey programming, a large portion of NFL and college football games, and over 50 percent of televised sporting events overall, in one streaming service.
Venu’s launch was blocked last year in federal court by Fubo, on the grounds that putting three different networks with sports broadcast rights under one service would muscle out competition. Fubo’s business model, which allows users to stream live channels with an emphasis on sports networks, would be particularly at risk. “A marketplace that offers only one sports-focused package of channels is monopolistic,” Fubo argued in a public campaign against Venu. A federal judge agreed with the antitrust suit Fubo filed and granted a preliminary injunction against Venu.
So Disney just went ahead and bought a controlling stake in Fubo. Fubo and Disney’s Hulu + Live TV operations will maintain their brands, but they will be operated by the same management team. Fubo has to negotiate carriage fees with Disney and other cable network owners, and under this deal it will apparently get access to Disney’s ESPN family of sports networks. (Hulu + Live TV is more focused on entertainment options.)
Part of the deal settles Fubo’s Venu Sports lawsuit against all parties. Fubo will get a cool $220 million for that settlement, as well as a $145 million loan from Disney. So let’s be clear about what happened: Disney was blocked in its attempt to create a combined sports giant with its own competitors. So it bought the company that was doing the blocking, paying them off so the joint venture can continue.
If Fubo exists in a few years, I’d be stunned. Venu Sports will always have an advantage, in that it won’t have to pay carriage rights to run those sports channels. The agreement stipulates specifically that Fubo will still have to pay carriage rights from Disney, even though Disney is the corporate parent. Those carriage rights will likely rise continuously, and when Fubo is squeezed out of business, removing its competition, prices for Venu Sports will spike as well. It feels like a “catch and kill” scenario by Disney, buying off a nuisance rival to get its consolidation project off the ground. But who exactly is going to object to Disney and pals buying their way into market dominance?
The bets are being made that nobody, actually, will raise any challenge, in several facets of the entertainment business. In November, Comcast spun off its cable networks into a separate company, and Warner Bros. Discovery unfurled a similar deal, separating its TV networks from its streaming channels and movie studio. John Malone’s Liberty Media has restructured itself as well.
All of this is preparatory to a huge buying spree. The new stand-alone cable conglomerates could seek safety in numbers by buying one another. The streamers will have the flexibility, unencumbered by deadweight cable channels, to team up as well, whether in a joint venture like with Venu or something more integrated. Perhaps a bigger land grab will be happening among local broadcasters, as conglomerates like Sinclair, Scripps, and Tegna go hunting for channels. WBD’s David Zaslav is among the many studio executives lunging at the “opportunity for consolidation.”
But these rumblings of merger activity are significantly less brazen than simply buying out a holdout to dealmaking to stop a legal proceeding. If the incoming Trump team waves through both the Disney-Fubo deal and the Venu Sports joint venture, letting a company merge to quash a lawsuit, the tone will be set for effective neglect of the concentration of Hollywood.
So what would that mean? While there will be competition in streaming for sports—Amazon, Apple TV+, and Netflix have all dabbled in sports, and CBS/Paramount and NBC/Peacock still have a significant share of sports programming—the Venu play creates an undisputed leader. It also leaves no value proposition left for cable television. Not a single scripted entertainment show appeared in the top 100 most-watched broadcasts of 2024; outside of awards shows, election-year content (debates and results), and the Macy’s Thanksgiving Day Parade, the rest was sports. If they migrate to streaming, cable and broadcast are dead, as I wrote about last August.
That means higher prices for à la carte programming. It means fewer outlets for filmmakers and showrunners and musicians to show off their talents, leading to lower pay and less freedom. It will likely mean less stuff to watch; look at the standoff between owners of the James Bond franchise and Amazon, which purchased MGM studios a couple of years back. And it raises uncertainty about the future of news and local programming in America, or whether we will have a less-informed citizenry, less connected to their home communities.
The incoming Trump administration’s antitrust enforcers will signal comfort with these outcomes if they neglect enforcement of this deal. They will also in effect inform the business community that they can buy out anyone who stands in the way of market concentration.
