Sens Bernie Sanders, Elizabeth Warren raise 'serious' antitrust concerns over ESPN's media deals with NFL, MLB
U.S. Sens Bernie Sanders (I-VT) and Elizabeth Warren (D-VT) and House members Pat Ryan (D-NY) and Joaquin Castro (D-TX) signed a letter on Tuesday to leadership at Disney, ESPN, the NFL and MLB raising concerns over ESPN's proposed media deals with the two sports leagues.
The letter raised antitrust concerns over unfair competition that could cause harm to consumers and ESPN's competitors. It also expressed concerns over ESPN's ability to objectively cover the NFL in the event of an approved partnership and asked why the NFL chose to include commercials in the RedZone channel this season.
'Sports fans should not be forced to pay more'The letter is in response to recent media agreements between ESPN and NFL and MLB. In August, the NFL agreed to sell the bulk of its media assets, including NFL Network and the linear rights to the RedZone Channel, to ESPN in exchange for a 10% equity stake in ESPN that could be worth billions of dollars.
Later in August, news broke that ESPN was in talks with MLB over an agreement that would allow the network to carry MLB.TV and the rights to all out-of-market baseball games and select in-market games. Both of the deals are expected to be subject U.S. regulatory approval.
Tuesday's letter was addressed to Disney CEO Robert Iger, ESPN chairman Jimmy Pitaro, NFL commissioner Roger Goodell and MLB commissioner Rob Manfred. Disney is the parent company of ESPN.
"The agreements between ESPN, the NFL, and Major League Baseball (MLB) that have recently become public raise serious concerns and could entrench ESPN's dominance over competitors in sports distribution," the letter reads. "As prices rise across the board, including for cable and satellite TV and streaming services, sports fans should not be forced to pay more or jump through more hoops to watch their favorite team.
"We are concerned that these new deals could hurt consumers by disadvantaging competitors, limiting choices, raising prices for viewers, and creating potential conflicts of interest."
The letter lays out five specific concerns over ESPN's deal with the NFL. It states concern that the deal would incentivize the NFL to give preferential treatment to ESPN over its other distribution partners that include CBS and Fox.
It expresses concern that the deal would further entrench ESPN's status as the dominant sports rights distributor, leading to higher prices and fewer choices for viewers. It raises concern that expanded distribution of the RedZone channel through ESPN could undercut competing networks by drawing viewers away from their coverage of games.
Concerns over ESPN's journalistic role as watchdogThe letter also addresses specific conflict of interest concerns over ESPN's journalist arm to be able to fairly cover the NFL under the terms of the proposed deal.
"Aside from its role as a distributor of sports content, ESPN is an important source of sports-related news, and its staff of reporters, investigative journalists, and analysts covers breaking news stories and provides in-depth analysis across leagues," the letter reads. "Over the years, ESPN and affiliated reporters have served the public interest by reporting on developing stories and, at times, covering scandalous behavior in professional sports."
The letters specifically cites recent ESPN coverage of reported collusion between the NFL and NFLPA leadership that ultimately led to the resignation of embattled NFLPA executive director Lloyd Howell.
"The ESPN-NFL deal raises concerns regarding whether reporters and journalists would be under pressure from ESPN executives or their new part-owner regarding coverage of this $400+ billion industry," the letter states.
The letter also raises concerns over the proposed merger of NFL's fantasy product into ESPN as reducing options for fantasy players.
Consumer concerns over proposed MLB dealThe letter also addresses specific concerns about ESPN's proposed deal with MLB.
"Although details of the deal remain uncertain, this second tie-up between ESPN and another sports behemoth raises concerns about consumer protection and competition," the letter reads. "For example, ESPN could make it more difficult and more expensive for current cable or other linear MLB.TV subscribers to watch games.
"ESPN could force fans to subscribe to the ESPN media ecosystem in order to access games and charge an additional price to watch local teams' games."
As of the timing of Tuesday's letter, it's not clear if either of ESPN's deals with the NFL or MLB will be granted federal regulatory approval. None of the letter's recipients had publicly responded to the letter or its concerns as of Wednesday.