Judge sides with FuboTV to delay launch of joint streaming venture from ESPN, Fox, Warner Bros.

MANHATTAN (CN) — A federal judge on Friday axed plans for the fall launch of Venu Sports, a slated joint sports streaming platform by ESPN, Fox and Warner Bros. Discovery, finding that the service would likely violate antitrust laws.

Fellow streaming service FuboTV filed an antitrust lawsuit in February against Venu, where it accused the media titans behind it of leveraging their “iron grip on sports content to extract billions of dollars in supra-competitive profits” to the ultimate detriment of the consumer.

Venu was set to offer streaming of linear channels ESPN, ESPN2, ESPNU, SEC Network, ACC Network, ESPNEWS, ABC, FOX, FS1, FS2, Big Ten Network, TNT, TBS and truTV. The massive offering, coupled with the networks supposedly charging Fubo unfairly high content licensing rates, would harm competition and make streaming more expensive for the American consumer, according to the suit.

With Venu’s launch slated for late 2024, Fubo asked a federal judge to halt the rollout, citing the “irreparable harm” if Venu is allowed to hit the market before the case is settled.

Ultimately, the judge agreed. In a 69-page ruling filed Friday in Manhattan federal court, U.S. District Judge Margaret Garnett granted Fubo’s motion for a preliminary injunction, effectively delaying Venu’s launch until after the antitrust questions have been answered in court.

In her ruling, Garnett concluded Fubo’s lawsuit has serious teeth — enough to suggest that consumers could be significantly harmed if Venu is allowed to launch as planned.

“Fubo is ultimately likely to succeed in demonstrating that [Venu] will substantially lessen competition or tend to create a monopoly in contravention of this country’s antitrust laws,” Garnett wrote.

The judge appeared to lament the practice of “bundling” in the television industry, in which programmers only allow their networks to be distributed as a group.

“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,” Garnett wrote.

It’s an issue that affects distributors as well as consumers, according to the original complaint, where Fubo accused the defendant programmers of forcing it to “spend hundreds of millions of dollars to license and broadcast content that its customers do not want or need.”

That practice forces Fubo to raise the price of its own service, Fubo claims, which Venu is now coming in to undercut.

Fubo’s co-founder and CEO David Gandler celebrated the judge’s ruling Friday, calling it “a victory not only for Fubo but also for consumers.”

“This decision will help ensure that consumers have access to a more competitive marketplace with multiple sports streaming options,” Gandler said in a statement.

It’s not over, though. The preliminary injunction only keeps Venu from launching as the case plays out in court. If Fubo eventually loses, Venu will likely be free to release.

“But our fight continues,” Gandler said. “Fubo has said all along that we seek equal treatment from these media giants, and a level playing field in our industry. The proposed joint venture was only the latest example of anticompetitive practices that The Walt Disney Company, FOX Corp. and Warner Bros. Discovery have consistently engaged in for many years. We believe these practices monopolize the market, stifle competition and cheat consumers from deserved choice.”

ESPN, Fox and Warner Bros. pledged to appeal the ruling. In a joint statement Friday, they insisted that Venu is a “pro-competitive option” that would help consumers, not harm them.

“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 networks said. “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.”

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