Congressional Democrats Wants to Conduct Hearings on Disney and Fox Deal
A leading Democrat on the Senate's antitrust oversight committee is calling for a hearing for the recent Disney and Fox merger.
Sen. Amy Klobuchar (D-MN) has expressed fears how the mega-deal gives a huge amount of authority in the entertainment industry to a single studio. She said, per Deadline, "I'm concerned about the impact of this transaction on the American consumer."
According to antitrust expert Larry Downes, Disney will likely argue that purchasing a rival studio such as Fox is no more than a defensive move in its attempt to reinforce itself in the midst of powerful Silicon Valley competitors and shifting distribution models emerging left and right:
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Disney is saying we need more clout because we're losing leverage to the Netflixes and Amazons and Googles. When it's a defensive deal, antitrust should encourage it — because you've got a competitor that's becoming weaker.
The concern, however, is how Disney will enjoy so much leverage in the television side of things with Fox's 22 regional sports network being added to ESPN, which adds its 88 million subscribers to the former's 61 million.
With that in mind, BTIG media analyst Richard Greenfield and Public Knowledge's senior policy counsel Phillip Berenbroick fear that the massive deal will give Disney the power not just to require bigger channel bundles that will cost more, but also demand higher prices from cable, satellite and Internet TV distributors.
Greenfield writes:
Ultimately, the real losers will be consumers who are forced to buy bigger channel bundles — including more and more unwanted networks — at higher prices. Why would the government allow the biggest programmer "bully" to grow significantly stronger?
Berenbroick, on the other hand, says:
You have the potential to not only drive up the cost of the package. One of the concerns we've raised in other merger contexts, Time Warner-AT&T and others, is the diversity and availability of independent programming.
Another part of the deal that is also getting the scrutiny is Disney's 40 percent share of the domestic box office, which is bound to impact on the exhibitor community and the Mouse House's controlling interest in the streaming service Hulu, which is behind Netflix and Amazon in the streaming competition.
