Federal Judge Temporarily Blocks the Launch of Venu Sports
In what can only be described as a shocking development, U.S. District Judge Margaret Garnett has ruled in favor of FuboTV and blocked the upcoming launch of Venu Sports.
As a quick recap, Venu Sports is an upcoming sports-centric streaming service created as part of a joint venture between Disney, Fox, and Warner Bros. Discovery.
Following the announcement that the new streaming service was in development, Fubo quickly filed suit against the three companies. The partners, they alleged, had engaged in a years-long campaign to block Fubo’s sports-first streaming business.
Fubo’s Argument
In their filing, Fubo also asserted that the three companies combined control more than half of the U.S. sports rights market and have thus put other distributors at an extreme disadvantage by teaming up.
“Each of these companies has consistently engaged in anti-competitive practices that aim to monopolize the market, stifle any form of competition, create higher pricing for subscribers and cheat consumers from deserved choice. By joining together to exclusively reserve the rights to distribute a specialized live sports package, we believe these corporations are erecting insurmountable barriers that will effectively block any new competitors from entering the market,” Fubo CEO David Gandler said.
“This strategy ensures that consumers desiring a dedicated sports channel lineup are left with no alternative but to subscribe to the Defendants’ joint venture.”
Judge Margaret Garnett Blocks Venu’s Launch
Today, Judge Garnett sided with Fubo, deciding that the company would likely succeed in showing that the new joint venture would “substantially lessen competition and restrain trade.”
If Venu Sports launches, Garnett wrote, there will likely be a “swift exodus” of Fubo subscribers, which will eventually lead to the company’s bankruptcy.
Venu would be the “only option on the market for those television consumers who want to spend their money on multiple live sports channels they love to watch, but not on superfluous entertainment channels they do not.”
Disney, Fox, and Warner Bros. Discovery Respond
For their part, the three Venu Sports partners believed that Fubo was simply trying to shut down any competition. Essentially, they said, Fubo was a weak company that could not stand on its own two feet.
“Sports fans would be deprived of a new, lower-cost option for watching games. Innovation would be thwarted. And output would be suppressed,” Warners stated in a court filing. “Competition would be hindered.”
Additionally, Disney, Fox, and Warner asserted that each party would continue to negotiate with the sports leagues and would have no say in how the others licensed their content.
Finally, Venu did not include any stations from CBS Sports or NBC Sports, meaning that the streamer was not all-encompassing.
“We respectfully disagree with the court’s ruling and are appealing it,” Disney, Fox and Warner Bros. Discovery said in a statement following today’s ruiling. “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.”
What Now?
While it is likely that the three parties will not give up on Venu Sports so easily, with the NFL, NBA, and college football seasons just around the corner, they are running out of time.
The partners will have to act swiftly if they want to get Venu Sports off the ground this year. Today, then, was a shocking (but perhaps not fatal) setback.
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