Out of bounds —
Upcoming launch of $42.99 sports package likely to "substantially lessen competition."
Gina Ferazzi via Getty
A US judge has temporarily blocked the launch of a sports streaming service formed by Disney’s ESPN, Warner Bros and Fox, finding that it was likely to “substantially lessen competition” in the market.
The service, dubbed Venu, was expected to launch later this year. But FuboTV, a sports-focused streaming platform, filed an antitrust suit in February to block it, arguing its business would “suffer irreparable harm” as a result.
On Friday, US District Judge Margaret Garnett in New York granted an injunction to halt the launch of the service while Fubo’s lawsuit against the entertainment giants works its way through the court.
The opinion was sealed but the judge noted in an entry on the court docket that Fubo was “likely to succeed on its claims” that by entering the agreement, the companies “will substantially lessen competition and restrain trade in the relevant market” in violation of antitrust law.
In a statement, ESPN, Fox and Warner Bros Discovery said they planned to appeal against the decision.
Venu was aimed at US consumers who had either ditched their traditional pay TV packages for streaming or never signed up for a cable subscription. “Cord cutting” has been eroding the traditional TV business for years, but live sports has remained a primary draw for customers who have held on to their cable subscriptions.
Fubo TV was launched in 2015 as a sports-focused streamer. It offers more than 350 channels—including those carrying major sporting events such as Premier League football matches, baseball, the National Football League and the US National Basketball Association—for monthly subscription prices starting at $79.99. Its offerings included networks owned by Disney and Fox.
ESPN, Fox and Warner Bros said Venu was “pro-competitive,” aimed at reaching “viewers who currently are not served by existing subscription options.”
Venu was expected to charge $42.99 a month when it launched later this month. It “will feature just 15 channels, all featuring popular live sports—the kind of skinny sports bundle that Fubo has tried to offer for nearly a decade, only to encounter tooth-and-nail resistance,” Fubo said in a court filing seeking the injunction.
Venu was expected to aggregate about $16 billion worth of sports rights, analysts have estimated. It was not expected to have an impact on the individual companies’ ability to strike new rights deals.
Analysts had questioned its position in the marketplace. Disney plans to roll out ESPN as a “flagship” streaming service in August 2025 that will carry programming that appears on the TV network as well as gaming, shopping and other interactive content. Disney chief executive Bob Iger said he wants the service to become the “pre-eminent digital sports platform.”
Fubo shares rose 16.8 percent after the ruling, but the stock is down 51 percent this year.
© 2022 The Financial Times Ltd. All rights reserved Not to be redistributed, copied, or modified in any way.