A Motorsport Media Monopoly

A judge temporarily blocked Fox Sports, Disney and Warner Bros. Discovery’s sports streaming merger. What does it mean for motorsport?

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I can’t remember where I first read about Venu Sports, but I recall the “when.” It was early February when the trio of media conglomerates, forming one mammoth of a sports streaming empire, came onto my radar. I promptly looked to my right and then to my left and stopped anyone who ventured 500 feet within the topic to ask “Doesn’t this seem a little…monopolistic?” A federal judge agreed last Friday, temporarily stopping the business venture in its tracks. I’ll add it to my tucked away “I knew, liked and thought X before X was popular” list, along with Lizzo and Timothee Chalamet.

When U.S. Judge Margaret Garnett put a hold on the streaming merger between Fox Sports, Disney (ESPN) and Warner Bros. Discovery on August 16 and sided with FuboTV, the subsequent headlines heralded protecting small media broadcasters from the clammy, grabby and greedy hands of Big Broadcasting. 

But what hasn’t been mentioned in the mainstream, sports or motorsport media is what it means for racing. Embarrassingly, the greater good of the broadcasting free market wasn’t the first thing that crossed my mind when I heard about the merger. IndyCar rang the alarm bells first. 

The American open-wheel series’ media rights deal with NBC, a nearly two-decade-long relationship, expires at the end of 2024. In June, IndyCar sidled up to Fox Sports instead with a “historic” exclusive broadcasting deal. I blabbed to anyone who would listen in the months prior that if the sports streaming merger would go through, IndyCar’s well-being hinged on signing with Fox. If the series remained with NBC, continuing at its current rate of about $20 million a year, it would be the only open-wheel series aired on the channel. 

NBC continues to hold tightly onto its share of motorsport. NASCAR signed onto Fox Sports, NBC, Amazon and Warner Bros. Discovery in November with a $7.7 billion seven-year deal. The International Motor Sports Association (IMSA) extended its media rights deal with NBC in late June, agreeing to a 50 percent coverage increase. 

However, the merger threatens to loosen NBC’s white-knuckled grasp and create a motorsport media monopoly by buying up rights to the most popular series in a market with high streaming prices. 

Ashley Kalita, a top American motorsport streamer and content creator, tallied up how much it would cost for an American to watch motorsports—including the FIA World Endurance Championship (WEC), IMSA, IndyCar, Formula 1, Super Cross, MotoGP and NASCAR. The total came out to $1,236 a year. Kalita said she thinks that most people are watching races via illegal streams because of the steep cost. 

Venu Sports is a good sign for motorsport fans with light wallets. The streaming merger plans to charge customers just $42.99 each month when it launches in 2025. But for the small guys, like FuboTV, the low membership price and consolidation of power are dangerous. 

In 2022, Formula 1 agreed to a media rights deal with Disney’s ESPN worth up to a reported $90 million annually. Warner Bros. Discovery TNT bought the broadcasting rights to Formula E and MotoGP over the last year. Warner Bros-owned HBO Max recently began streaming the FIA World Endurance Championship, including the 24 Hours of Le Mans. All of those series, bringing in a total annual viewership of nearly a billion people, dwarf NBC’s racing series in popularity, star power and profitability. NASCAR and IndyCar’s respective 3.85 million and 1.51 million average race viewership will draw even more eyes to Venu Sports. Fox Sports’ acquisition of the Indianapolis 500 broadcasting rights come 2025 is expected to buoy viewership higher than NBC’s 13.3 million audience count in May. 

Garnett’s decision noted that “Disney, Fox, and [Warner Bros. Discovery] are each significant players in live sports licensing, who otherwise compete against each other both to secure sports telecast rights and to attract viewers to their live sports programming. But together, they are dominant.” In the 69-page ruling, Garnett granted FuboTV’s motion for a preliminary injunction and said that it was likely that the merger would violate antitrust laws. 

The most common antitrust cases violate two acts: Section One or Two of the Sherman Act and Section Seven of the Clayton Act. The latter prohibits mergers and acquisitions that could harm competition or form monopolies. In 2021, the U.S. Department of Justice (DOJ) successfully sued one of the “Big Five” book publishers for attempting to buy a competitor. The acquisition would turn an already weakened competitive marketplace of five giants into just four. Penguin Random House’s (PRH) attempted acquisition of Simon & Schuster violated the Clayton Act according to the DOJ. The impact of the merger, it argued, would be swift with PRH driving down author revenues and advances. 

Venu Sports threatens to do the same. Media rights revenues are soaring, especially in motorsport. When competition is reduced, sports franchises have fewer options and companies can offer less money. The larger companies, like the streaming trio, have deeper pockets than small-scale streaming and broadcasting platforms. Garnett emphasized in her decision that Fox Sports, Disney and Warner Bros. Discovery own 54 percent of all U.S. sports rights and over 60 percent of sports rights that broadcast nationally. “There is significant evidence in the record that the true figures may be even larger,” Garnett added. 

For a series like IndyCar, going with a better paycheck is expected. Before the Fox Sports deal was announced, Penske Entertainment President and CEO Mark Miles anticipated the value of IndyCar’s streaming and broadcasting rights would surge past NBC’s current offering. 

Antitrust violation allegations aren’t novel in the upper echelon of motorsport. In 1998, Karel Van Miert, the European Union competition commissioner and former Belgian Socialist Party leader, thought Formula 1’s interest in going public through an initial public offering (IPO) began to resemble a monopoly. “I’ve never had a case with so many infringements. And I’ve seen many cases,” Van Miert told a Wall Street Journal reporter that year. Formula 1 never went public. 

In August, the U.S. Department of Justice opened a formal probe into Andretti-Cadillac's rejection from Formula 1. Twelve Congress members from Indiana and Michigan argued that Formula 1 was violating the Sherman Act and said they have “Concerns with the apparent anti-competitive actions that could prevent two American companies, Andretti Global and General Motors (GM), from producing and competing in Formula 1.” 

Section Two of the Sherman Act prevents predatory pricing, “which prohibits the use of anticompetitive conduct to acquire or maintain monopoly power.” Andretti was prepared to pay the $200 million grid slot price for entry into the sport, but Formula 1 argued that it didn’t have sufficient evidence that Andretti would be competitive or add value to the sport. Congress claimed that Formula 1’s owner, Liberty Media, is protecting teams from raised prices and diminished profits. The prize pot at the end of the season, if Andretti successfully joined the 2025 championship, would be split between 11 rather than 10 teams. The additional team’s entry cost, however, aims to offset the prize pot disparity.

“We intend to fully cooperate with that investigation, including any related requests for information,” Liberty Media CEO Greg Maffei said. “We believe our determination or F1’s determination was in compliance with all applicable US antitrust laws.”

The president of the sport’s ruling body, Mohammed Ben Sulayem suggested that Andretti buy a team willing to sell rather than occupy an 11th place on the grid. Audi gave up its attempt to join as an additional team in March and will take over Sauber Formula 1 Team in 2026 as Audi F1 Team. While an additional team must pay $200 million for a spot in Formula 1, an existing team’s minimum price hovers above $750 million, Maffei shared last year. The pricier option promises not to threaten existing teams’ bottom lines but puts a higher price tag and more restrictions on entry into the sport.

“There is a methodology for expansion that requires approval of the FIA and the F1, and both groups have to find the criteria met,” Maffei said. “We’re certainly open to new entrants making applications and potentially being approved if those requirements are met.” While the sport’s ruling body approved Andretti’s bid, the Formula One Management Group (FOM), owned by Liberty Media, rejected the application.

On Friday, Fox Sports, Disney and Warner Bros. were quick to shut down any antitrust claims: “We believe that Fubo’s arguments are wrong on the facts and the law, and that Fubo has failed to prove it is legally entitled to a preliminary injunction. Venu Sports is a pro-competitive option that aims to enhance consumer choice by reaching a segment of viewers who currently are not served by existing subscription options.” FuboTV announced after Garnett’s ruling that it plans to continue the antitrust suit against Venu Sports. 

Antitrust law is a shadow of what it once was—beginning in the era of robber barons and successfully breaking up the businesses of Gatsby-like Gilded Age magnates. But the initial ruling is a sign of health and could prevent the kind of “irreparable harm in the absence of an injunction” that Garnett warned of. 

It may cost you a few bucks, or a few hundred if you’re a true motorsport fanatic, but that might be worth it for the greater good of democracy.