A federal court has thrown a flag on the play by the Walt Disney Co., Fox Corp., and Warner Bros. Discovery to launch a live sports streaming service that would carry live games from all of the major pro sports leagues.In a ruling Friday, the US District Court for the Southern District of New York granted FuboTV’s request for a preliminary injunction to block the launch of this Venu joint venture, finding that it would probably violate antitrust laws and devastate Fubo if allowed to go to market. “Put simply, the antitrust problem presented by [Venu] is as follows: if [Venu] is allowed to launch, it will 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,” Judge Margaret M. Garnett wrote in a 69-page opinion.Plus, she wrote, the joint venture’s owners had already used bundling deals to lock sports fans into paying for expensive channel bundles—a forced-carriage strategy that left Fubo pricing itself more and more like a traditional cable-TV service—and then agreed not to support any other sports-only bundles that might compete with Venu for three years. Announced in February, Venu will include content from a roster of sports networks owned by its corporate parents—for example, ESPN and sub-brands like ESPN+, ABC, FOX and its FS1 and FS2 channels, TNT and TBS—that would include live MLB, NFL, NBA, NHL, WNBA and NCAA games, among others. Venu announced a $42.99 “launch price” this month that subscribers can lock in for 12 months after launch, but rate hikes have been endemic in sports programming.The judge’s opinion notes that the three firms control “closer to three-fourths of the market” for NFL, NBA, MLB, NHL, and college football games; closer to 80% of the rights of all nationally broadcast games” in pro baseball, football, basketball and hockey; and a full 98% of playoff games in those leagues. That is a powerful lure, which Venu documents surfaced during the case estimate would lead to 50-70% of Venu subscribers dropping a pay-TV bundle to sign up for that service instead. And Fubo, which has pitched itself as a streaming service for sports fans, would get sacked. The opinion cites the company’s estimates that the launch of Venu would lead to it losing from 300,000 to 400,000 subscribers (it just reported 1.45 million subscribers in North America) by the end of the year, “causing an almost-immediate projected revenue loss between $75 million and $95 million.”The judge found that Venu likely violates section 7 of the Clayton Antitrust Act, the 1914 statute that banned a variety of anticompetitive practices that companies had indulged in to skirt the earlier Sherman Antitrust Act. Her ruling bars the three companies from launching the service.Fubo applauded the decision in a press release that quoted co-founder and CEO David Gandler saying “This decision will help ensure that consumers have access to a more competitive marketplace with multiple sports streaming options.”
Recommended by Our Editors
Fox, WBD, and Disney’s ESPN provided a statement to the New York Times’ Ben Mullin calling Fubo’s case “wrong on the facts and the law” and calling Venu “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.”Other TV providers that have struggled with increases in sports-programming costs even as cord cutting has cut into their subscriber bases shared similar views. “We are pleased with the court decision and believe that it appropriately recognizes the potential harms of allowing major programmers to license their content to an affiliated distributor on more favorable terms than they license their content to third parties,” DirecTV spokesman Jon Greer said in a statement.ACA Connects, a trade group of smaller broadband and TV providers, posted a statement in which president and CEO Grant Spellmeyer called Venu “blatantly anticompetitive” and an example of “media giants” inflating costs for everybody. “For years, ACA Connects Members have tried to offer our customers the programming they want—but only the programming they want—at reasonable prices,” he said. “But programmers force them instead to take bloated and expensive bundles of programming.”
Get Our Best Stories!
Sign up for What’s New Now to get our top stories delivered to your inbox every morning.
This newsletter may contain advertising, deals, or affiliate links. Subscribing to a newsletter indicates your consent to our Terms of Use and Privacy Policy. You may unsubscribe from the newsletters at any time.
About Rob Pegoraro
Contributor
Rob Pegoraro writes about interesting problems and possibilities in computers, gadgets, apps, services, telecom, and other things that beep or blink. He’s covered such developments as the evolution of the cell phone from 1G to 5G, the fall and rise of Apple, Google’s growth from obscure Yahoo rival to verb status, and the transformation of social media from CompuServe forums to Facebook’s billions of users. Pegoraro has met most of the founders of the internet and once received a single-word email reply from Steve Jobs.
Read Rob’s full bio
Read the latest from Rob Pegoraro
