(NewsNation) — Three lawmakers are asking the Department of Justice to open an investigation into Venu Sports, suggesting the new sports streaming venture from Disney, Fox and Warner Bros. could be violating antitrust and telecommunications regulations.
Sens. Elizabeth Warren, D-Mass., Bernie Sanders, I-Vt., and Rep. Joaquin Castro, D-Texas, sent the letter requesting an investigation and for the DOJ to possibly stop the venture from going forward.
The letter, first reported by The Athletic, says the streaming service’s status as a joint venture should not exempt the project from investigation. Venu is already facing a legal challenge from competitor Fubo, which claims it is in violation of Federal Communications Commission regulations.
Venu is a direct-to-consumer streaming service that plans to offer live sports, combining resources from ESPN, Fox Sports, TNT Sports and ESPN+ for $42.99 a month without requiring a cable subscription.
The lawmakers noted that Venu would control 80% of broadcast sports and more than half of all sports rights, including major sports events from the NFL, NBA, MLB, NASCAR and FIFA World Cup, among others. That would require competitors to negotiate with Fox, Disney and Warner Bros. for sports rights while also competing with them.
“This massive new sports streaming company would be poised to control more than 80% of nationally broadcast sports and more than half of all national sports content, putting it in a position to exercise monopoly power over televised sports. The market power of its three giant parent companies would enable it to discriminate against competitors and increase prices for consumers,” the lawmakers wrote.
The letter also argues that Venu would be in violation of the FCC’s ownership cap, which prevents any one station from reaching more than 39% of households, the same argument Fubo is making in court.
ESPN has defended the project by noting the number of households it reaches has declined and saying the network has to reach consumers who have cut cable or never had it to begin with.
Lawmakers argued the “consolidation could lead to higher prices and fewer choices. An empirical study of cable television found that when companies with concentrated market power bundle their products, they are able to extract higher profits from consumers as ‘bundling requires (consumers) to purchase unwanted channels, to the benefits of firms.'”
Lawmakers note that the FCC has prohibited proposed mergers in the past because they would give a company too much control over rights or prevent competition and drive up prices for consumers. Those included a proposed 2018 merger between Sinclair Broadcasting and Tribune Media, as well as a proposed 2020 merger between EchoStar and DirectTV.
The trio urged the DOJ and FCC to block the deal if it does not serve the “public interest, convenience, and necessity.”
Venu Sports did not immediately respond to a NewsNation request for comment.