Venu Sports claims huge investment in lawsuit appeal

It’s been a little more than a week since the ESPN-Warner Bros. Discovery-Fox joint streaming venture Venu Sports has been sidelined. And now the triumvirate of media companies have officially launched an appeal to see the decision overturned, arguing that they’ve already spent tens of millions of dollars on what they argue is “an innovative and competitively-priced streaming offering.”

A federal court judge blocked the launch of Venu Sports this fall thanks to a lawsuit from competing streaming entity Fubo on antitrust grounds given the unequal playing field of their curated bundle. While the ruling may have a ripple effect throughout the television industry , the immediate fallout is that the future of Venu Sports is completely up in the air and will ultimately be decided by a lengthy legal process.

The next step in that process is a filing by ESPN, Warner Bros. Discovery, and Fox of an expedited appeal. In that appeal, they argue that time is of the essence as their investment (and employees hired to work for Venu) are left hanging.

Here is the argument from the Venu Sports appeal via Deadline :

Venu Sports (“Venu” or the “JV”) is an innovative and competitively-priced streaming offering for sports-focused fans that will only add another option to the broad and continuingly growing panoply of offerings that sports and video consumers have to choose from when deciding how to spend their time and money. Appellants are appealing the district court’s decision and respectfully submit that it contains multiple legal errors. Appellants’ appeal should be heard on an expedited basis because time is of the essence: while the district court’s injunction remains in place, Appellants are losing tens of millions of dollars that they have invested in a start-up business that has been blocked from coming to market, dozens of employees who were hired to work for Venu are left in limbo, and consumers are denied access to the innovative new product that Venu would have provided and the increased competition that would result from a new product offering.

Just how many millions? Later on in the filing, Venu outlays the cost of starting up the streamer as $74 million that doesn’t even include money spent on research, legal fees, and other “corporate expenditures.” Maybe most central to the Venu Sports business is the fact that a protracted appeals process will cost them sign-ups at the start of football season, which was the whole reason for trying to launch in the coming weeks.

Enjoining the launch of Venu causes Appellants and the employees who have been hired to launch Venu substantial hardship. By the end of August, Appellants together will have invested approximately $74 million in preparing for the launch of a new streaming business, in hiring personnel for that business and in developing its technological platform. The number does not include the millions spent on research and analysis, legal fees, and other necessary corporate expenditures. Appellants will receive no return on that investment so long as Venu is enjoined. Indeed, the injunction has already deprived Venu of the opportunity to attract a segment of sports fans during the season when they are most likely to sign up-the start of football season in September

Fubo already has hit back at the expedited appeal, arguing that if ESPN, Fox, and Warner Bros. Discovery are so intent on going direct to consumer, they should just launch their own independent products, which… ESPN is already committed to doing in the very near future .

It’s an interesting legal and PR argument from Fubo because ESPN has a planned DTC offering coming while WBD has their Max streaming service. Conventional wisdom would indicate it’s really a deal that affects Fox Sports more than anyone else since they don’t have their own streaming service for sports, nor have they indicated a desire to do so.

The next step in the Venu-Fubo lawsuit is a pre-trial conference set for September 12th and, if it gets that far, a possible jury trial coming in 2025.

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