Elizabeth Warren Slams Disney, Fubo Deal In DOJ Letter: 'Another Data Point In History Of Anticompetitive Behavior'

Senator Elizabeth Warren (D-Mass.) is targeting Walt Disney Company's DIS proposed tie-up with FuboTV FUBO that could change the streaming sector.

What Happened: In a letter to the Department of Justice, Warren asks for close scrutiny on the deal due to antitrust concerns and fear that consumers will end up paying more for sports streaming content in the long run.

"This proposed acquisition raises significant concerns under antitrust law, would give Disney increased market power and incentives to increase costs for viewers, and should be regarded as another data point in Disney's history of anticompetitive behavior," Warren said in the letter.

Warren highlighted that Disney's deal with Fubo resolves a previous lawsuit Fubo filed against Disney, Fox and Warner Bros. Discovery over a joint venture called Venu Sports. Warren previously wrote the DOJ on Venu Sports.

"Disney's proposed acquisition of Fubo appears to allow Disney to simultaneously circumvent the lawsuit while gobbling up a competitor."

Warren said Disney is attempting to "purchase its way around antitrust law."

With the tie-up with Fubo, Disney would dominate the sports streaming market, Warren said.

The Senator said Disney's acquisition will decrease competition and could violate antitrust law.

"Disney has proposed a plan to acquire its competitor, and, in the process become an even more powerful force in an already highly-concentrated market."

Warren said Disney has long forced companies to carry less desirable content in order to get access to the highly coveted ESPN sports network. This practice has led to consumers paying more for streaming and cable content.

Why It's Important: Warren's letter comes after Disney previously announced it would merge Hulu + Live TV with Fubo and own 70% of the combined company. The deal also ended the pending launch of Venu Sports and saw Fubo and Disney end litigation.

News of Warren's letter to the DOJ comes as a judge declined to dismiss a lawsuit against Disney by investors, as reported by The Hollywood Reporter.

The investor lawsuit centers on past claims made by former Disney CEO Bob Chapek about the Disney+ streaming platform. Chapek allegedly hid streaming costs and overstated the ability for the unit to grow subscribers and become profitable.

Among the items in the lawsuit, filed in 2023, is Disney’s plan to grow its Disney+ subscriber total to 230 million by 2024. The company's total stood at 124.6 million Disney+ core subscribers as of December 2024.

The lawsuit also targets Disney's reorganization plans and changes to its original content and the shortened theatrical window for movies to hit streaming platforms.

Bob Iger replaced Chapek as CEO in November 2022. Iger cut streaming content spending and withdrew subscriber guidance when he took over.

The class action lawsuit targets the period of December 2020 to May 2023 when Disney stock dropped by around 55%.

With news of the case moving forward, along with Warren's letter to the Department of Justice, Disney may see negative headlines in the coming months.

Price Action: Disney stock is down 1.3% to $109.87 on Thursday versus a 52-week trading range of $83.91 to $123.74. Disney stock is up 0.4% over the last year.

Fubo stock is down 1.8% to $3.79 on Thursday versus a 52-week trading range of $1.10 to $6.45. Fubo stock is up 90% over the last year.

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