Disney-Fox-Warner sports streaming service blocked by judge
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Kansas City Chiefs quarterback Patrick Mahomes looks to throw under pressure from San Francisco 49ers defensive end Nick Bosa in Super Bowl LVIII. Photo: Ethan Miller/Getty Images
A federal judge granted a temporary injunction against an upcoming streaming joint venture formed by Disney, Fox and Warner Bros. Discovery after a rival streamer sued it on antitrust grounds.
Why it matters: The companies' Venu Sports was supposed to launch later this month but now faces an uncertain future.
Catch up quick: In February, Fubo TV filed a lawsuit in an attempt to block the streaming service.
- The company argued the joint venture would give those three less incentive to make their channels available on Fubo and other distributors, as well as charging Fubo above-market rates.
- Last week, Sen. Elizabeth Warren (D-Mass), Sen. Bernie Sanders (I-Vt.) and U.S. Rep. Joaquin Castro (D-Texas) asked the Justice Department to scrutinize the venture over antitrust concerns.
- Venu will include content from linear TV networks housed by the three companies, which include ESPN, ABC, TNT and Fox, among others. It was set to cost $42.99 a month at launch.
- For years, distributors have sought to offer the same type of sports-centric TV package but met resistance from three major entities: Disney, Warner Bros. Discovery and Fox.
Zoom in: The temporary injunction was handed down on Friday, following a weeklong trial in New York's Southern District that concluded on Monday.
- In her ruling, Judge Margaret Garnett said that Fubo "is likely to be successful in providing its claims that [Venu] will violate this country's antitrust claims" and that both Fubo and U.S. customers "will face irreparable harm in the absence of an injunction."
The big picture: Venu was seen as a way for the three companies to reach the increasing number of sports fans who do not subscribe to a pay-TV service.
- For years, live sports was seen as the last pillar holding up the cable bundle, but that is no longer the case.
- In recent years, sports have quickly migrated toward streaming services or back to broadcast television, two distribution methods that don't require a TV subscription.
Yes, but: It's uncertain how large the audience would be for an offering like Venu, as it does not include networks from Paramount or Comcast.
- ESPN is also launching its own streaming service next year that could cannibalize the audience for both.
- A similar offering, Echostar's SlingTV, has existed for years but struggled to catch on with less than 2 million subscribers.
The other side: "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," the three companies said in response to the ruling, adding that they will appeal the ruling.
What's next: Venu has yet to announce a launch date, but Fubo's lawyers revealed during the trial that it was slated for Aug. 23.
Editor's note: This story was corrected to identify Castro as a representative (the previous version referred to him as a senator).
