Walt Disney’s ESPN, FOX, and Warner Bros. Discovery’s planned sports streaming joint venture called Venu Sports will face a major challenge in court today. This comes as Fubo is going to court today to ask a judge to block Venu Sports with an injunction.
Fubo in the lawsuit alleges that three media giants stole from the Fubo playbook and that this new venture is the latest attempt in a years-long campaign to block its business. If successful Fubo could put a hold on the new streaming service for months or even years as the court case goes forward.
Update: The court case is over and both sides have laid out why the service should be allowed to go forward or not. Now we wait for the judge to rule in the case likely later this week or next week.
“This sports cartel blocked our playbook for many years and now they are effectively stealing it for themselves,” CEO David Gandler said in a statement.
Earlier this month Disney, FOX, and Warner Bros. Discovery announced the partnership, which would offer 14 live channels of sports, including ESPN, BTN, FOX Sports, and sports from TNT—to name a few. This would address one of the main complaints of streaming services—the need to switch between apps to see all the games.
But the partnership has elicited backlash from a myriad of parties, from small cable companies to even the sports leagues, which are busy reviewing their own contracts.
Fubo also took aim at the media companies’ requirement that it carry multiple non-sports channels as a condition of getting access to the likes of ESPN and FS1. The forced “bundling” now puts it at a disadvantage over the new JV, which will only carry sports-centric channels. It added that Fubo gets charged licensing rates that are 30% to 50% higher than other distributors.
“These actions individually and collectively increase the costs Fubo must pass onto customers,” the company said. “Fubo believes it has incurred billions of dollars in damages as a result of the Defendants’ actions.”
With Fubo focused heavily on sports streaming, it is easy to understand why it could be worried about this new joint venture. The service threatens to remove the middleman costs of a service like Fubo, potentially allowing the JV to offer a lower price.
“Each of these companies has consistently engaged in anticompetitive practices that aim to monopolize the market, stifle any form of competition, create higher pricing for subscribers and cheat consumers from deserved choice,” Gandler said. “By joining together to exclusively reserve the rights to distribute a specialized live sports package, we believe these corporations are erecting insurmountable barriers that will effectively block any new competitors from entering the market.”
Now the question is will Fubo successful put a hold on the service or will they need to find a way to survive with the new live TV streaming service on the market.