by Ray Keating
December 4, 2018

Across nations and cultures, there is at least one constant, i.e., regulators’ inabilities to understand how markets work.

Another case of this governmental shortcoming was on display in a reportfrom Reuters noting that Brazil’s antitrust regulator has raised concerns about the Walt Disney Co deal to buy Twenty-First Century Fox’s entertainment assets.

According to Reuters the Brazilian antitrust body’s report asserted that the deal would mean “a significant increase in concentration in the market of sports channels on cable TV and a high probability that Disney could control the market.” In turn, this could “potentially reduce the quality and diversity of the sports content available, besides raising costs that could be passed on to consumers.”

Antitrust regulation always has been a dicey endeavor … at best. After all, antitrust regulators have to claim omnipotence, as they must not only be able to clearly see where an industry is now, but also must be able to see inside the minds of consumers and have absolute clarity as to where the market is headed. In reality, much of the antitrust endeavor is a case of governmental arrogance rooted in ignorance.

In this case, the authors of this Brazilian antitrust report fail to see the enormous choices that consumers already have in terms of video entertainment, and that markets are only accelerating toward greater consumer power and options thanks to ongoing innovation and competition. The notion that Brazilian regulators have raised questions about this Disney-Fox deal based on potential “concentration in the market of sports channels on cable TV” exhibits a rather stunning inability to define the relevant market (antitrust regulators seeking to regulate always define markets far too narrowly), and a gross ignorance as to what consumers actually are doing. At this point, given multiplying options, does anyone really care about sports channels on cable TV?

However, this is only a report, not a conclusion. According to Reuters, Brazil’s antitrust body has until March 23, 2019, to make a decision, though that could be extended another 90 days. Who knows? Perhaps this silly report will be tossed into the trash bin, and the Disney-Fox deal approved based on actual economics and an understanding of how markets actually work.

Ray Keating is the editor, publisher and economist for, and author of the Pastor Stephen Grant novels, with the three latest books being Reagan Country: A Pastor Stephen Grant Novel, Heroes and Villains: A Pastor Stephen Grant Short Storyand Shifting Sands: A Pastor Stephen Grant Short Story. He can be contacted at