The DOJ’s Antitrust division had previously filed suit against the proposed merger, citing competitive harm to the market, in an attempt to block the deal. Specifically, the Justice Department argued that without this divesture, the deal would result in higher prices for cable sports programming in each of the 22 impacted regions since Disney and Fox would no longer be directly competing for market share.
“American consumers have benefitted from head-to-head competition between Disney and Fox’s cable sports programming that ultimately has prevented cable television subscription prices from rising even higher,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division, said in a statement. “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.”
This new proposal would, assuming the court approves it, should be enough to counteract those anti-competitive problems. Disney is reportedly on-board with the proposal, as it would enable the company to resolve this issue faster than if it continued to fight the DOJ lawsuit.