Disney and Fox present arguments to the FNE for not selling Fox Sports Chile

Chilean National Economic Prosecutor’s Office (FNE) could decide in the coming days on the sale of Fox Sports in the country. On August 31st, 2018, Disney -represented by lawyer Claudio Lizana, and Fox by lawyer Ignacio Larraín-, provided information to the entity, suggesting that the operation does not represent risks to make free market competition sure, which is why both companies did not offer to sell the networks. In November last year, FNE requested to investigate the operation and would pronounce a decision on the issue.

One of the main Chilean market problems before the possible channels sale refers to the possible concentration that could take place in sports broadcasts. With  Disney-Fox merger, there will be only two competitors in the Chilean sports sector: the Disney-Fox conglomerate and the Football Channel (CDF), in Turner’s hands. However, both companies presented arguments to the FNE in order not to sale the channel to Chile. Among them, they claim not to be content producers, but “outsource” the service, mainly sports content. According to statements that have given to the auditor, both channels license the content and do not produce it, but buy the rights through tenders. In addition, they argued that the CDF concentrates the monopoly of football National Championship broadcastings, which makes Fox and Disney not major competitors in this area.

Another argument given by Disney and Fox refers to the existence of new competitors. The companies argued that, for example, this year’s Copa Libertadores is being broadcast by Fox Sports and Facebook. This means that the new company to be created after the merger will not only compete with the rest of the channels, but also with OTTs such as Netflix, Facebook or YouTube. Both companies were asked, but did not give any answer on Fox Sport’s sale in Chile.