close
close

Yiamastaverna

Trusted News & Timely Insights

Judge temporarily bans sports streamer Venu and sides with Fubo
Massachusetts

Judge temporarily bans sports streamer Venu and sides with Fubo

A closeup view of a broadcast camera with the NFL crest and ESPN Monday Night Football logo is shown during a game between the Chicago Bears and the Minnesota Vikings at Soldier Field in Chicago on December 20, 2021.

Icon Sportswire | Icon Sportswire | Getty Images

A US judge has temporarily blocked media companies Disneys, Warner Bros. Discovery And fox from launching its sports streaming service Venu, court documents show.

The injunction, which was issued in response to a lawsuit filed by Fubo TVcomes just weeks before the start of the National Football League season. The companies had planned to launch their service by that date.

Fubo, an internet TV package similar to the traditional pay TV package, claimed in its lawsuit that Venu was anti-competitive and would disrupt its business. Fubo’s stock rose 16 percent on Friday after the injunction was announced.

“Today’s ruling is a victory not only for Fubo, but also for consumers. This decision will help ensure consumers have access to a more competitive market with multiple sports streaming options,” Fubo CEO David Gandler said in a press release following the court decision.

Warner Bros. Discovery, Fox and Disney’s ESPN announced the creation of the joint streaming service in February. Shortly thereafter, Fubo filed an antitrust lawsuit against the company.

On Friday, Fubo said it intends to continue its antitrust lawsuit against the companies over their anticompetitive practices. In recent months, politicians including Sen. Elizabeth Warren (D-Massachusetts), Sen. Bernie Sanders (I-Vt.) and Rep. Joaquin Castro (D-Texas) have sent a letter urging for a closer look at Venu.

“We disagree with the court’s decision and will appeal,” Warner Bros. Discovery, Fox and Disney’s ESPN said in a joint statement on Friday.

“We believe that Fubo’s arguments are incorrect as to the facts and the law, and that Fubo has failed to demonstrate that it is legally entitled to an injunction. Venu Sports is a pro-competitive option that aims to increase consumer choice by reaching a segment of viewers currently underserved by existing subscription options.”

Earlier this month, Venu announced a price of $42.99 per month.

The service would offer the full range of live sports rights from its parent companies, including NBA, NHL, MLB, college football and basketball. Venu subscribers would also have access to 14 of its parent companies’ traditional TV sports networks, including ESPN, ABC, Fox, TNT and TBS, as well as the ESPN+ streaming service.

The high price is common for live streaming of sports broadcasts and does not jeopardize the broadcasting agreements with traditional pay-TV providers.

In court documents, U.S. Judge Margaret Garrett found that the three companies control about 54 percent of all U.S. sports rights and at least 60 percent of all nationally broadcast U.S. sports rights.

“The records contain substantial evidence that the actual amounts may be even higher,” Garrett said in court documents.

“This means that Disney, Fox and (Warner Bros. Discovery) are each individually significant players in the licensing of live sports, otherwise competing with each other to both secure the rights to broadcast sports and attract viewers to their live sports programs. But together they are dominant,” Garrett said, explaining her decision.

Outside these companies Paramount Global CBS and Comcast’s NBC is the other largest holder of US sports rights. Streaming services such as Amazon Prime Video now only offers live sports broadcasts.

An advertisement for Venu Sports, the sports streaming company owned by Disney, Warner Bros. Discovery and Fox, hangs at Fanatics Fest in New York City on August 16, 2024.

Jessica Golden |

Marketing for Venu has so far aimed at appealing to sports fans outside of the traditional pay-TV package.

But Fubo’s lawsuit alleges that the sports streaming service violates antitrust laws, the latest example of anti-competitive behavior by the three media companies.

Last week, a hearing lasting several days was held, attended by representatives of Fubo as well as the satellite TV bundle providers DirecTV and EchoStars Dish – which also offers competing Internet TV packages and supported Fubo in the lawsuit – argued that the streaming package would hurt its business.

During the hearing, a lawyer for Warner Bros. Discovery told the judge that a temporary restraining order would result in Venu’s “termination,” Front Office Sports reported.

“This ruling is a major victory for consumers and competition in the video market,” said Jeff Blum, EVP of government and external affairs at EchoStar, in a statement.

“We are pleased with the court’s decision and believe it adequately recognizes the potential harm that comes from allowing major programmers to license their content to an affiliated distributor on more favorable terms than if they license their content to third parties,” DirecTV said in a statement Friday.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

Don’t miss these insights from CNBC PRO

LEAVE A RESPONSE

Your email address will not be published. Required fields are marked *