Regulators Could Flag ESPN-NFL Deal Over Concerns About Control, Cost & Competition

The NFL and ESPN may be teaming up in a big way, but their newly announced partnership isn't set in stone yet. Legal experts say the deal is likely to face a serious review by the U.S. Department of Justice, and the approval process could take up to a year.

Under the deal, ESPN will acquire NFL Network, the league’s RedZone channel and other media assets. In return, the NFL gets a 10% stake in ESPN — a piece estimated to be worth $2.5 to $3 billion, based on ESPN’s current valuation.

It’s a massive shakeup in sports media, but will regulators even let it happen?

(Photo by Matthew Huang/Icon Sportswire via Getty Images)

Andre P. Barlow, a partner at Doyle, Barlow & Mazard, told Reuters the deal "surely raises competition concerns," explaining that it could give Disney (which owns ESPN) even more control over sports broadcasting.

"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.

If you’ve already been frustrated trying to figure out how to watch your team — bouncing from cable to streaming services to subscriptions and back — you’re not alone. It’s a problem big enough that Congress has gotten involved.

"In an era of deep partisan division, sports might be the most powerful cultural unifier we have," Senator Ted Cruz said during a May Senate Commerce Committee hearing. "But those millions of fans are asking a simple question: ‘Why does it seem to be getting harder — and more expensive — to just watch the game?’"

John Bergmayer of the nonprofit Public Knowledge raised the same concerns, noting how streaming costs are starting to feel like cable all over again.

"Some viewers feel like they finally broke free of the cable bundle only to watch it re-forming (before) their eyes," Bergmayer said in Senate testimony.

The Justice Department is already taking a closer look at Disney’s earlier deal to take control of sports streaming service Fubo TV. So the ESPN-NFL arrangement will likely be subject to the same scrutiny.

And if history is any indication, it won’t be a rubber stamp.

Back in 2018, the DOJ blocked Disney from acquiring 21st Century Fox’s 22 regional sports networks on antitrust grounds, citing ESPN’s already dominant position in sports broadcasting. The concern then was that letting Disney own both national and local sports networks would reduce competition and drive up prices for fans.

"American consumers have benefited from head-to-head competition between Disney and Fox’s cable sports programming," said Makan Delrahim, then-assistant attorney general and head of the Antitrust Division. "Today’s settlement will ensure that sports programming competition is preserved in the local markets where Disney and Fox compete for cable and satellite distribution."

So if Disney wasn’t allowed to control local sports networks seven years ago, how exactly is a stake-swapping megadeal with the NFL — the biggest national sports property in the country — supposed to fly now?

ESPN Can No Longer Objectively Cover The NFL

There are also questions about what this means for journalism — particularly how ESPN covers the league it now partially co-owns.

"This deal calls into question some age-old journalism questions that apparently neither the NFL nor ESPN believe valid, or they wouldn't have done this deal," OutKick’s own Armando Salguero wrote. "With the NFL getting a stake in ESPN, the idea that it is covering the league as an independent, outside information source is no longer valid."

DAN ZAKSHESKE: ESPN Drops All Pretense That It Does Journalism With NFL Deal

And while the merger would certainly be a win-win for the two multi-billion-dollar corporations, the path to approval might get messy. Politics are already in the mix, considering President Donald Trump’s past involvement in blocking (or at least influencing) deals that impacted the NFL, including stadium negotiations tied to the Washington Commanders' name change.

Under the new deal, ESPN will acquire NFL Network, the league’s RedZone channel and other media assets.

(Photo by Kara Durrette/Getty Images)

For now, the NFL has reached out to 30 congressional offices to try and ease concerns and to highlight how the deal could mean more content and more choices for fans. But regulators still get the final say.

The Justice Department is expected to lead the review, and they’ll be watching this one closely. Whatever the DOJ decides, this deal will shape how millions of Americans watch football for years to come.