Venu, the much-discussed streaming sports joint venture backed by Disney, Fox and Warner Bros. Discovery has been blocked from its goal.
U.S. District Judge Margaret Garnett in federal court in Manhattan barred the three companies on Friday from launching Venu, deciding that the FuboTV sports streaming service would likely prevail on claims that the new broadband entity would “substantially lessen competition and restrain trade.” Fubo launched in 2015 as a start-up focused on streaming sports programming.
“We respectfully disagree with the court’s ruling and are appealing it,” Disney, Fox and Warner Bros. Discovery said in a statement. “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.”
Venu, expected to launch in late August ahead of the start of the NFL’s coming fall season and priced at an initial price tag of $42.99 per month, was to carry all of the sports offerings of ESPN, Fox Sports 1 and 2, and TNT for a price that is seen as more than a regional sports network but less than a full programming package available via YouTube TV or Hulu + Live TV. The three parent companies are targeting a new generation of consumers who disdain the high costs of traditional cable packages are more at home with signing up for streaming venues that are relatively easy to get in and out of based on the availability of favorite entertainment programs or sporting events.
Judge Garnett found that once Venu launches, FuboTV would face “a swift exodus” of large numbers of subscribers, and indicated she felt “that Fubo’s bankruptcy and delisting of the company’s stock will likely soon follow. These are quintessential harms that money cannot adequately repair.”
Fubo alleged that Venu’s launch “will cause it to lose approximately 300,000 to 400,000 (or nearly 30%) of
its subscribers, suffer a significant decline in its ability to attract new subscribers, lose between
$75 and $95 million in revenue, and be transformed into a penny stock awaiting delisting from
the New York Stock Exchange, all before year-end 2024,” the judge said in her decision.
Disney, Fox and Warner Bros. Discovery have been working in recent months to build the site’s technology and consumer experience, but the launch of Venu remained subject to regulatory approvals and the finalization of definitive agreements amongst the parties. The companies envision making the service available via an app, but also expected to distribute it in bundles that could involve Disney+, Hulu or Max.
Source Agencies
