A judge has temporarily blocked the launch of Venu Sports, the upcoming sports streaming service from Disney's ESPN (DIS), Warner Bros. Discovery (WBD), and Fox (FOXA), on antitrust concerns just weeks ahead of the start of NFL season.
The preliminary injunction comes after sports streamer FuboTV (FUBO) filed a lawsuit against the media giants behind the JV in February seeking to block the service, citing "the extreme suppression of competition in the US sports-focused streaming market."
Shares of Fubo, which boasts more than 200 channels and 1.5 million North American subscribers, rose as much as 22% following the news Friday. Shares of Disney, Fox, and WBD were little changed on the announcement.
US District Judge Margaret Garnett determined in her ruling Friday that the launch of the joint venture would "substantially lessen competition and restrain trade." Furthermore, it would also ensure "a swift exodus of large numbers of Fubo’s subscribers" and that "Fubo’s bankruptcy and delisting of the company’s stock will likely soon follow. These are quintessential harms that money cannot adequately repair."
David Gandler, Fubo co-founder and CEO, called the ruling 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."
Disney, WBD, and Fox responded to the injunction with a joint statement, saying, "We respectfully disagree with the court’s ruling and are appealing it."
"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. 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.”
Disney, WBD, and Fox first announced the joint venture in February and teased a debut sometime this fall. The service would bring together their respective slates of sports rightsand would come as media companies face pressure from investors to scale their streaming services and achieve profitability.
In March, Fox CEO Lachlan Murdoch shrugged off Fubo's lawsuit, saying the company did not have regulatory concernssurrounding the service.
"When you look at the service, it's pro-consumer, it's pro-competition," he said at the time. "It's focused on a cohort of people in a segment [that's] not served at all with sports content."
Earlier this month, the companies announced a price point of $42.99 a month for Venu. Executives have also reiterated expectations that the service will hit around 5 million by 2029 and that the opportunity lies in capturing the "cord cutters" and the "cord nevers."
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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