Ahead of what is expected to be a difficult regulatory process, ESPN is already facing scrutiny in Washington for its recent dealmaking.
Four U.S. lawmakers — including Senators Elizabeth Warren and Bernie Sanders — expressed “serious concerns” about ESPN’s potential acquisitions of NFL Network and MLB.tv in a Tuesday letter to Disney CEO Bob Iger, ESPN president Jimmy Pitaro, NFL commissioner Roger Goodell and MLB commissioner Rob Manfred, specifically that the deals “could hurt consumers by disadvantaging competitors, limiting choices, raising prices for viewers, and creating potential conflicts of interest.”
The ESPN-NFL Media deal, which was announced last month and grants the NFL a ten percent stake in ESPN in exchange for NFL Network and additional assets, requires regulatory review before it can go into effect, a task that does not fall to members of Congress. (ESPN’s as-yet-unofficial MLB deal, which reportedly includes MLB.tv, does not require any such review.) While NFL and MLB benefit from antitrust exemptions that theoretically give Congress some input over their decision-making, it should be noted that all four lawmakers are of the minority party and as such are unlikely to have any real ability to impact either agreement.
Nonetheless, the letter is the first concrete indication of what has widely been assumed, which is that the ESPN-NFL Media deal will raise questions among policymakers. Those assumptions have largely concerned the federal agencies who thus far this year have used the opportunity afforded by regulatory review to extract concessions from media companies. Less attention has been paid to lawmakers like Warren, who previously opposed the creation of the Venu app and requested a DOJ review of the ultimately abandoned venture during the previous administration.
Ultimately, opposition party lawmakers are far less significant to the deal’s approval than the regulators. But it is worth noting that if the ESPN-NFL Media deal finds itself held up by the administration, there is no guarantee that it will find much support from the other side.
As for the letter itself, the NFL section largely covered issues that have already been addressed by the particulars, for example the potential that the NFL will give ESPN “anticompetitive preferential treatment” over the league’s other partners or that the NFL deal will create a conflict of interest for ESPN’s journalists. Both ESPN’s Pitaro and the NFL’s Goodell have answered questions about both concerns publicly, saying that the agreement will not prevent the companies from maintaining an arm’s length distance in negotiations or ESPN from doing critical reporting.
Unlike the NFL deal, which was announced in August, the MLB deal has yet to be officially struck and little has been said on the record about its details. Thus, the lawmakers’ concerns were based more on yet-to-be-confirmed details, such as ESPN potentially requiring a subscription to its direct-to-subscriber service in order to access MLB.tv.
The lawmakers concluded by asking for responses to a series of questions, including how the NFL and ESPN plan to avoid giving each other preferential treatment and whether MLB.tv will still be available as a standalone product. It should be noted that one of the questions concerns the NFL’s decision to run ads during RedZone, and whether the league conferred with ESPN before making that decision. As most readers are likely aware, ESPN has nothing to do with the production of RedZone, which first tested out advertisements late last season.
