Disney Antitrust Lawsuit Against Hulu, ESPN Ownership Moves Forward – Walt Disney (NYSE:DIS)

Media company Walt Disney Co DIS is banking on future growth driven by sports and streaming ambitions.

These two entities may prove problematic in connection with the ongoing antitrust trial.

What happened: Disney is the majority owner of the streaming platform Huluhaving plans to acquire the remaining shares it does not own from the minority owner Comcast Company CMCSA.

Owning Hulu and the ESPN sports channel led to antitrust claim filed by YouTube TV subscriberswhich he owns Alfabet sp GOOGGOOGLE.

The lawsuit alleged that Disney violated antitrust laws by being both a content provider and distributor. The lawsuit, filed in 2022, also alleged that Disney raised subscription prices for the ESPN broadcast for TV and streaming providers.

Federal Judge Edward Davila The Hollywood Reporter reported that he filed a motion and did not dismiss the lawsuit. The judge found that Disney could use its ownership of Hulu and ESPN to act anticompetitively against rivals.

Disney is said to have raised prices after taking control of Hulu and also raised prices for ESPN for Hulu’s competitors.

The allegations include forcing DirecTV and Sling TV to offer ESPN on their cheapest packages. The lawsuit said Disney “assured that AT&T/DirecTV Now” would not be able to undercut Hulu + Live TV due to increased rates for ESPN.

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What’s next: As long as the antitrust investigation continues, YouTube TV subscribers will not be able to seek compensation in a class action lawsuit, the report says.

YouTube TV subscribers will be able to seek a court order to prevent Disney from committing future antitrust violations. Subscribers can also recover money for breaches of competition law and consumer protection regulations.

As The Hollywood Reporter wrote, since the Hollywood strikes, Disney’s role as a content provider and distributor has come into greater focus.

The Writers Guild of America argued that Disney’s acquisitions of Pixar, Marvel and Lucasfilm led to price increases for the company’s streaming services.

A future ruling in this case may be widely watched by the media and the streaming industry as it could impact future acquisitions and partnerships on streaming platforms.

DIS price action: Disney shares are trading at $102.18 compared to a 52-week trading range of $78.73 to $123.74. Disney shares are up 15% over the past year.

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