A close-up view of a broadcast camera showing the NFL crest and ESPN Monday Night Football logo during the game between the Chicago Bears and Minnesota Vikings at Soldier Field on Dec. 20, 2021 in Chicago.
ICON SPORTSWIRE | ICON SPORTSWIRE | Getty Images
US judge temporarily shuts down media companies Disney, Warner Bros. Discovery and Fox According to court documents, the company has been barred from launching its sports streaming service, Venu.
This preliminary injunction is Fubo TVThe deal was announced just weeks before the start of the National Football League season, and the companies were scheduled to launch the service by that date.
Fubo, an Internet TV bundle similar to traditional pay-TV packages, argued in the lawsuit that Venu is anti-competitive and will disrupt its business.Fubo shares rose 16% on Friday following news of the injunction.
“Today’s ruling is a win not only for Fubo but also for consumers. This decision will help ensure consumers have access to a more competitive marketplace with multiple sports streaming options,” Fubo CEO David Gandler said in a press release after the ruling.
Warner Bros. Discovery, Fox and Disney’s ESPN announced a streaming service joint venture in February, shortly after which Fubo filed an antitrust lawsuit against the venture.
Fubo said Friday it intends to pursue an antitrust lawsuit against the companies, accusing them of anticompetitive behavior. In recent months, Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.) and Joaquin Castro (D-Texas) and other lawmakers have written letters calling for scrutiny of Venu.
“We respectfully disagree with the court’s decision and will appeal,” Warner Bros. Discovery, Fox and Disney-owned ESPN said in a joint statement on Friday.
“We believe Fubo’s arguments are flawed on the facts and the law, and that Fubo has failed to demonstrate legal entitlement to a preliminary injunction. Venu Sports is a pro-competitive option designed to increase consumer choice by reaching audiences underserved by existing subscription options.”
Earlier this month, Venu announced pricing of $42.99 per month.
The service will offer all of the parent company’s live sports rights, including the NBA, NHL, MLB, college football and basketball. Venu subscribers will also have access to the parent company’s 14 traditional television sports networks, including ESPN, ABC, Fox, TNT and TBS, as well as streaming service ESPN+.
The move will not affect distribution agreements with traditional pay-TV providers, as live sports streaming typically commands high prices.
In court documents, U.S. Judge Margaret Garnett noted that the three companies control about 54 percent of U.S. sports rights and at least 60 percent of U.S. sports rights that are broadcast nationally.
“There is significant evidence in the record that the actual figure may be even higher,” Garnett said in court documents.
“This is Disney, Fox and [Warner Bros. Discovery] “Each company is a significant player in live sports licensing and competes with each other to secure sports broadcast rights and attract audiences to live sports programming. Together, however, the companies would have an advantage,” Garnett said in his ruling.
Apart from these companies, Paramount Global CBS and Comcast NBC is the largest holder of sports broadcasting rights in the United States. Amazon Prime Video has also begun exclusively streaming live sports.
Traditional pay-TV distributors are rapidly losing customers to notoriously expensive bundled subscriptions in favor of streaming services, while streaming options for bundled subscriptions such as Fubo are seeing prices rise due to the high programming costs associated with the networks they carry.
An advertisement for Venu Sports, a sports streaming venture by Disney, Warner Bros. Discovery and Fox, is displayed at the Fanatics Fest event in New York City on August 16, 2024.
Jessica Golden | CNBC
Until now, Venu’s marketing has focused on targeting sports fans outside of traditional pay-TV subscribers.
But Fubo’s lawsuit alleges that the sports streaming service violates antitrust laws, marking the latest example of anti-competitive behavior by the three media companies.
A multi-day hearing was held last week, during which representatives of Fubo and satellite TV bundle providers DirecTV and Echo Star’s Dish, which also offers a competing internet TV bundle and sided with Fubo in the lawsuit, argued that streaming bundles would harm its business.
During the hearing, lawyers for Warner Bros. Discovery told the judge that an injunction would result in Venu being “fired,” Front Office Sports reported.
“This ruling is a major victory for consumers and for competition in the video marketplace,” Jeff Blum, EchoStar’s executive vice president of external and government relations, said in a statement.
“We are pleased with the Court’s decision and believe it properly recognizes the potential harm of allowing major programming companies to license their content to affiliated distributors on more favorable terms than they could license to third parties,” DirecTV said in a statement Friday.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
