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The ESPN-NFL deal reportedly faces a major roadblock from the United States Department of Justice (DOJ).
The sides agreed to a deal, formally announced Tuesday, in which ESPN will acquire NFL Network and other media assets, including NFL RedZone, from the National Football League in exchange for the league taking a 10% equity stake in the all-sports network as part of a landmark agreement.
However, the DOJ is expected to conduct a substantive review of the new ESPN-NFL transaction, Reuters reported, citing a source. Another source said obtaining U.S. antitrust clearance could take up to 12 months.
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ESPN recently announced its direct-to-consumer streaming platform. (Robin Alam/Icon Sportswire via Getty Images / Getty Images)
The Athletic originally reported that a deal “will require regulatory approval, which could take nine months to a year.”
Andre P. Barlow, a partner at Doyle, Barlow & Mazard, said the transaction “surely raises competition concerns,” because it could potentially give Disney greater control over televised sports carriage and reduce competition.
“The deal could potentially result in higher costs for consumers, as Disney’s dominance in sports media could limit options and drive up prices for streaming services or game access,” Barlow said.
A view of the NFL Logo displayed on the field during the Philadelphia Eagles vs Kansas City Chiefs game at Caesar’s Superdome. (Getty Images / Getty Images)
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Spokespeople for the NFL and ESPN did not immediately respond to requests for comment.
The expected review comes as the Justice Department’s Antitrust Division is examining a separate deal Disney reached earlier this year to acquire a controlling stake in the sports streaming service Fubo TV. The division demanded additional information from the companies in March to examine whether the deal would unduly concentrate the market for sports streaming.
The deal said that NFL RedZone will be available on ESPN’s new direct-to-consumer streaming service, which is available on Aug. 21.
“By combining these NFL media assets with ESPN’s reach and innovation, we’re creating a premier destination for football fans,” ESPN chairman Jimmy Pitaro said in a statement. “Together, ESPN and the NFL are redefining how fans engage with the game — anytime, anywhere. This deal helps fuel ESPN’s digital future, laying the foundation for an even more robust offering as we prepare to launch our new direct-to-consumer service.”
The two sides still have to negotiate a final agreement and receive approval from NFL owners. The agreement is subject to regulatory approval and no value was provided.
The ESPN logo at the Super Bowl LIX media center at the Ernest N. Morial Convention Center. (Kirby Lee/Imagn Images / IMAGN)
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A day after the NFL announcement, ESPN and WWE both announced that the pro wrestling’s premium live events (WrestleMania, SummerSlam, Royal Rumble, etc.) will be broadcast on the service beginning next year.
FOX Business’ Landon Mion and Reuters contributed to this report.
