Lawmakers Voice Antitrust Concerns Over Pending Disney, Fox, Warner Bros. Discovery Sports App

U.S. House of Representatives Jerry Nadler (D-NY), ranking member, House Judiciary Committee, and Rep. Joaquin Castro (D-TX) April 16 sent a letter to Disney CEO Bob Iger, Fox CEO Lachlan Murdoch and David Zaslav, CEO of Warner Bros. Discovery, citing concerns of possible negative consumer impact and anti-competitive behavior as a result of their sports streaming app Joint Venture.

Jerrold “Jerry” Nadler

Citing recent comments by Disney CFO Hugh Johnson, who said his company, Fox and WBD collectively control 80% of the consumer access to major live sports on television, the lawmakers wondered how the companies’ proposed sports app joint venture would impact consumers’ streaming access to major sports going forward.

“Without more complete information about the pricing, intent, and organization of this new venture, we are concerned that this consolidation will result in higher prices for consumers and less fair licensing terms for upstream sports leagues and downstream video distributors,” Nadler and Castro wrote in their letter.

Among the 18 questions submitted by the lawmakers were: what consumer markets would be affected by the joint venture; the app’s projected subscriber numbers; whether the app would distribute non-partner content; how the pricing of Fox Sports, ESPN, TBS, etc., included in the app would compare with their access on pay-TV; and if the the JV would offer stand-alone streaming sports services, among other issues.

Joaquin Castro

“The Joint Venture raises questions about how this new offering would affect access, competition, and choice in the sports streaming market,” Nadler and Castro wrote. “Without more complete information about the pricing, intent, and organization of this new venture, we are concerned that this consolidation will result in higher prices for consumers and less fair licensing terms for upstream sports leagues and downstream video distributors.”

The lawmakers said they want the CEOs to answer by no later than April 30, with their responses copied to the Department of Justice.

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Fox CEO Expects Initial 5 Million Subs for Sports Streaming App Joint Venture

The pending Disney, Warner Bros. Discovery and Fox joint venture sports streaming app is projected to generate 5 million paying subscribers in the first five years, according to Fox Corp. CEO Lachlan Murdoch.

Speaking March 4 at the Morgan Stanley’s Technology, Media & Telecom Conference in San Francisco, Murdoch said the app, which combines ESPN, Fox Sports and Warner Bros. Discovery’s sports-themed content on TBS, TNT, Bleacher Report Sports and Max, into a standalone platform would target upwards of 60 million consumers not currently paying for linear TV access — but with a “high percentage” interested in sports.

“It’s actually a net positive for the industry,” Murdoch said, adding that Fox remains platform-agnostic when it comes to distributing content, including live sports.

He dismissed suggestions the “pro-consumer package” would accelerate cord-cutting and initially attract 10 million to 20 million subscribers. Instead, Murdoch envisions the app operating like an online TV service, similar to YouTube TV.

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“We don’t think this is the case,” Murdoch said. “What this bundle does is put a majority of sports into one bundle. It’s an easy place for sports fans to come to.”

He didn’t divulge possible pricing for the app, which some analysts believe could cost from $40 to $50 monthly.

Fox: Tubi Saw 62% Surge in Q2 Viewing, 17% Increase in Ad Revenue

Fox Corp.’s ad-supported streaming video platform Tubi saw a 62% increase in viewing time, along with a 17% spike in advertising revenue for the fiscal quarter that ended Dec. 31, 2023.

The platform averaged 78 million monthly users, who logged in 2.5 billion streaming hours in the quarter (up from 1.54 billion hours in the previous-year period) and set a new monthly record of 855 million total viewing hours in December alone.

“Tubi has consolidated its position in the streaming landscape, ranking as the most-watched free TV and movie streaming service in the United States, according to Nielsen, and surpassing Peacock, Max, Paramount+, and Pluto TV in view time for seven consecutive months,” Fox CEO Lachlan Murdoch said on the company’s Feb. 7 fiscal call.

While Tubi continues to gain market traction (and advertising revenue), Fox said overall ad revenue dropped 20% in the quarter primarily due to the absence of the FIFA Men’s World Cup at Fox Sports (compared with 2022), lower political advertising revenue at the Fox Television Stations due to the absence of the 2022 midterm elections, and the impact of elevated supply in the direct response marketplace, lower ratings and higher preemptions associated with breaking news coverage at Fox News Media.

Fox reported net income of $115 million on revenue of $4.23 billion, compared compared to net income of $321 million on $4.61 billion as compared in the prior year quarter.

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Fox, ESPN, Warner Bros. Discovery Announce Landmark Joint Sports Streaming Venture

Fox Corp., Disney-owned ESPN and Warner Bros. Discovery have formed a sports streaming joint venture that aims to soften the effect of the rising cost of live sports programming while retaining joint ownership.

The unnamed and unpriced JV would stream on WBD’s Max streaming service, in addition to Disney-owned Hulu and ESPN+, and launch sometime later this year. Subscribers would also have standalone access to Max, Disney+ and Hulu.

Bob Iger, CEO of The Walt Disney Co., said the new service represents a significant moment for Disney and ESPN, a major win for sports fans, and an important step forward for the media business.

“This means the full suite of ESPN channels will be available to consumers alongside the sports programming of other industry leaders as part of a differentiated sports-centric service,” Iger said in a statement.

Speaking on the Feb. 7 fiscal call, Fox CEO Lachlan Murdoch said legacy pay-TV remains the company’s primary focus, while adding that the new streaming service would target the 60 million consumers outside of the traditional bundle TV market with an array of “amazing sports content” in one place.

“We’ve done lots of sensitivity analysis, and we would not be launching this product if we thought it was going to significantly affect our pay-TV affiliate partners and that’s very important to us,” Murdoch said. “So the opportunity is huge. And that’s really because this platform is focused entirely not on cord cutters, but cord nevers.”

David Zaslav, CEO of Warner Bros. Discovery, said the new sports service exemplifies the media company’s ability to drive innovation.

“This service will] provide consumers with more choice, enjoyment and value,” Zaslav said.

WBD’s Max streaming service currently offers select live sports programming through its branded Bleacher Report app.

Sports covered by the new JV platform include:

PRO FOOTBALL NFL | UFL
PRO BASKETBALL NBA | WNBA
BASEBALL MLB
HOCKEY NHL
COLLEGE SPORTS ACC, Big 10, Big 12, Big East, SEC | 40 NCAA Championship Events |

NCAA Men’s & Women’s Basketball Tournaments |

The College Football Playoff

GOLF PGA Tour | PGA Championship | The Masters | TGL
TENNIS Wimbledon | US Open | Australian Open
CYCLING Giro d’Italia | UCI Mountain Bike World Cup | Giro Donne
SOCCER FIFA World Cup | U.S. SoccerNWSL | MLS | LALIGA | Bundesliga | UEFA | CONCACAF
COMBAT SPORTS UFC | Top Rank
AUTO Formula 1 | NASCAR | 24 Hours of Le Mans

With both NBCUniversal’s Peacock streaming service and Paramount+ increasingly offering live sports, professional sports leagues are eyeing the transitioning market dynamics as a way to increase license rights.

With the exception of ad-supported Tubi, subscription-based Fox Nation and ad-supported Fox Weather, Fox has no direct-to-consumer streaming option for sports.

The National Basketball Association is looking to renegotiate its broadcast rights with ESPN and WBD’s TNT, which could reportedly fetch upwards of $70 billion over a 10-year deal.

Amazon currently pays the NFL $1 billion annually to exclusively distribute “Thursday Night Football” on Prime Video.

Both Prime Video and Peacock reportedly paid the NFL $100 million each for exclusive rights to Black Friday and Wild Card Weekend games, respectively.

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Warner Bros. Discovery Licenses DC Studios Superhero Movies, TV Shows to Tubi

Warner Bros. Discovery is reportedly licensing the bulk of its DC Studios’ superhero movies to Tubi, the ad-supported streaming video platform of the Tubi Media Group, a division of Fox Corporation that oversees the company’s digital businesses.

The non-exclusive deal includes immediate access to Batman, Batman Returns and Batman Forever, as well as Superman: The Movie and Superman II, and TV series, “Batwoman,” “Gotham” and “Krypton”. Other titles include The Batman, Suicide Squad, Black Adam, Wonder Woman and Aquaman, among others.

The pact also includes the launch of 10 new WBD-branded free ad-supported streaming television channels, in addition to the renewal of 13 existing FAST channels.

WBD CEO David Zaslav has made no secret his desire to mine incremental revenue licensing proprietary content to third-party distribution platforms beyond the media giant’s Max streaming service. Indeed, the majority of the DC Universe content catalog had been limited to streaming on Max.

“The addition of recent blockbuster movies and fan-favorite series from the DC library is a monumental offering for Tubi viewers,” Tubi chief content officer Adam Lewinson said in a statement.

And Tubi is expanding beyond catalog content and into live sports. The streamer last month inked a deal with the NBA G League, the NBA’s official development league, to stream select games on the NBA G League TV channels. The channel features more than 75 live games each season, including more than a dozen G League Ignite games and select G League Playoff games.

The WBD/Tubi agreement was first reported by Variety.

CFO: Fox Keeping Eyes Open for Live Sports Streaming Option

Outside of the Fox Nation subscription streaming VOD service, and its ad-supported Fox Weather and Tubi platforms, Fox Corp. remains a legacy pay-TV distributor. But should live sports shift direct-to-consumer, Fox, which distributes the NFL, MLB, Major League Soccer, NASCAR, NCAA football, basketball, FIFA World Cup, and WWE SmackDown across linear and online pay-TV networks, is ready to participate, according to CFO Steve Tomsic.

Speaking Dec. 4 at the UBS Global Media & Communications Conference in New York, Tomsic was asked about Disney’s pending ESPN-branded live sports offering and how Fox would respond.

Tomsic acknowledged ESPN is a strong brand, but added that with much of live sports gobbled up by territorial TV rights, getting enough live sports on a singular streaming platform remains a challenge.

“We did a calculus of all the sort of distribution modes that could possibly emerge,” Tomsic said. “With sports in this country, they’re so fragmented. If you’re a sports fan and you want to watch the NFL in a given week, you go to Amazon for Thursdays, you go to us on Sunday, you’ve got CBS on Sunday, you’ve got NBC Sunday night and you’ve got ESPN on Monday. No one sports service is going to satisfy.”

Steven Tomsic

That said, should the slowly rising tide of live sports streaming, including select NFL games on Peacock, Paramount+ and Prime Video — including the latter’s recent deal to live-stream NASCAR races along with Max — reach the broadcast shoreline, Tomsic said Fox would be all in revisiting its strategy.

Specifically, the executive said Fox does not define itself by the delivery mechanism, or the way content is scheduled, adding that live sports and news are different than entertainment.

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“For entertainment, there’s no doubt that streaming has delivered a better user experience,” Tomsic said. “It’s on-demand, you watch it when you want to watch it. Sports and news are the opposite. Live sports expects the viewer to be on demand. People don’t watch replays of the news or live sports.”

“We don’t consider ourselves a linear TV programmer,” he added. “We have the rights capability, both on the sports side and on the news side, to be able to deliver our services DTC. We have a pretty extensive technology build. We have all the building blocks for us [direct-to-consumer], if and when that becomes appropriate. But for now, we still think the right strategy is where we’re at.”

Fox CEO: No Live Sports Coming to Tubi as Platform Topped 70 Million Q1 Monthly Average Users, Posted 30% Uptick in Ad Revenue

Fox Corp. Nov. 2 reported that its Tubi ad-supported VOD (AVOD) and free ad-supported streaming television (FAST) platform saw 30% revenue growth and 65% lift in total view time in the first quarter, ended Sept. 30. Tubi topped 70 million monthly active users in September, who logged nearly 4 billion streaming hours in the first half of the calendar year.

Fox reported Tubi remains the number one AVOD player and most-watched FAST service in the United States, topping rivals Pluto TV, Max, Paramount+ and Peacock in view time for five consecutive months, citing Nielsen data.

Speaking on the fiscal call, Fox CEO Lachlan Murdoch said Tubi’s high level of viewer engagement revolves around the platform’s content library, which exceeds 60,000 titles and translates into more than 225,000 movies and TV episodes, in addition to approximately 300 FAST channels.

During the quarter, Tubi introduced Rabbit AI, a ChatGPT recommendation engine, to help users navigate the platform’s content library.

“Our recent MRI study of streaming peers concluded that Tubi saw the fastest growth amongst young and diverse populations,” Murdoch said, adding that 33% of Tubi users do not migrate to rival platforms.

When asked whether Tubi would ever stream live sports, Murdoch shot down the idea quickly.

“We don’t envisage any kind of significant live sports on Tubi in the near or frankly, even long-term future,” he said.

The executive reiterated that Tubi remains primarily focused on video-on-demand entertainment, which Murdoch believes makes that content and user engagement more valuable to advertisers.

“It will be a long time before we see significant live sports on Tubi,” Murdoch said.

Meanwhile, the television business segment, which includes Tubi, realized first quarter, ended Sept. 30, revenue of $1.78 billion, an increase of $66 million from revenue of $1.71 billion reported in the prior year quarter.

The business unit saw advertising revenue increase $5 million to $910 million, as the broadcast of the Women’s World Cup at Fox Sports and continued growth at Tubi were partially offset by lower political advertising revenue at the Fox Television Stations and lower ratings at the Fox Network.

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Tubi Helps Fox Corp. Up Q4 TV Results With Record Revenue, Viewership

Network television advertising may be in a secular decline, but for ad-supported online streaming service Tubi. The Fox Corp.-owned AVOD/free ad-supported streaming television (FAST) platform continues to entice viewership and advertisers — from linear TV.

While advertising revenue dipped 1.5% to $688 million in the fourth quarter (ended June 30), from $698 million reported in the prior year quarter, the decline was largely due to lower political advertising at the Fox television stations and lower ratings among Fox television shows. It was offset by continued interest in Tubi and 9% higher affiliate fees ($61 million) paid by Fox distributors, which helped up the television business segment up revenue 4% to $1.59 billion, from $1.53 billion a year earlier.

“From the exceptional sports calendar that included Super Bowl LVII and [last year’s] FIFA Men’s World Cup, to the record-breaking [2022] political midterm cycle and the impressive growth seen at Tubi, the power of the Fox platform was on full display,” CEO Lachlan Murdoch said in a statement.

Speaking on the fiscal call, Murdoch called out Tubi’s appearance on Nielsen’s monthly “The Gauge,” the data tracker’s macroanalysis of audience viewing behaviors across key television delivery platforms, including broadcast, streaming and cable.

Murdoch said Tubi increased its viewership in fiscal 2023 by 79%, making it the No. 1 AVOD platform in the country — equal to a top five cable network.

“Tubi’s fiscal 2023 was nothing short of spectacular, underpinned by growth in total view time, which in turn, powered revenue growth,” Murdoch said.

The executive executive said the fiscal year amounted to a year of recognition for Tubi, its expanding content library and industry awards for its Super Bowl commercial.

“Each quarter in the fiscal year, saw successive gains at Tubi, but the fourth quarter was the most impressive of all,” Murdoch said, alluding the platform’s 47% increase in revenue and 65% climb in viewership.

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Fox Names David Espinosa Distribution President of All Brands, Including Tubi, Fox Nation, Fox Weather Streaming

Fox Corp. has named David Espinosa president of distribution, succeeding Mike Biard, who is leaving the company after more than 20 years to become COO of Nextstar. Espinosa, who most recently served as EVP of distribution strategy and business affairs, will now report to company COO John Nallen.

David Espinosa

Espinosa now oversees the company’s multi-platform content distribution for all its brands, including Fox Entertainment, Fox News, Fox Sports and Tubi, and manages all aspects of distribution with the Fox-affiliated television stations in more than 200 markets across the United States.

“We want to thank Mike for his meaningful contributions to Fox throughout his time with us and wish him continued success in his next chapter,” Nallen said in a statement. “David has been a valued member of the Fox team for 17 years, and we are confident that his leadership and strategic insight will provide a seamless transition for the distribution team and our partners.”

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Espinosa has served in increasingly senior roles since joining Fox in 2006, and was named EVP of distribution in 2018. In that role, he had oversight of the strategy of distribution agreements across cable, satellite and streaming, as well as Fox-affiliated television stations.

Prior to joining Fox, Espinosa spent 10 years in banking, first at Banco Nacional de Mexico (Banamex) and later at Banamex USA.

Tubi Founder Farhad Massoudi Departing as Fox Announces Formation of New Tubi Media Group

Fox Corp. April 26 announced the formation of the Tubi Media Group under the leadership of newly appointed CEO Paul Cheesbrough. Tubi founder Farhad Massoudi will depart the company. Tubi Media Group will announce the new CEO for Tubi Streaming in the near future while Massoudi remains through the transition period until the end of June.

The new division will house Fox’s standalone digital businesses — including Tubi, Credible and Blockchain Creative Labs — as well as the digital platforms and teams that underpin the media company’s wider digital business in sports, news and entertainment.

“Our strategic acquisition of Tubi in 2020 [for $440 million] established a cornerstone in our digital streaming strategy, which under Paul and Farhad’s leadership has driven record growth and is now the clear market leader in AVOD in the U.S.,” Lachlan Murdoch, executive chair/CEO of Fox Corp., said in a statement.

Murdoch said the timing is right to bring the company’s digital properties, which include the Fox Nation subscription streaming VOD service, together into a new business unit.

“[The Tubi Media Group] which will be tasked with spearheading our digital expansion and partnering with our brands to drive continued growth,” Murdoch said.

Cheesbrough, who served previously as CTO/president of digital for Fox Corp., where he oversaw the acquisition and management of Tubi, will continue to be based in Los Angeles and will report to Murdoch.

“I’d like to take this opportunity to thank Farhad for his partnership over the past few years,” Cheesbrough said in a statement. “He’s a true pioneer in the streaming space and saw the opportunity in AVOD long before others. The fact that we’re building this new business around Tubi’s brand and the momentum that the company has achieved is testament to everything that Farhad founded, built and delivered over the years.”

Massoudi thanked Fox, Murdoch and Cheesbrough for their guidance, support, and partnership over the past three years.

“I know that I am leaving Tubi in the best shape it has ever been, and its future is very bright,” he said.

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