Fox makes first move to splinter Fubo-Venu lawsuit

A question hovering over the sidelined Venu is will, if not when, the three founders–Walt Disney, Warner Brothers Discovery and Fox Corp.–splinter and end their vision for a streaming platform carrying their sports and sports related channels.

Last month, as part of Fubo’s antitrust lawsuit against Venu’s founders, a federal judge granted a preliminary injunction blocking the planned launch that was set days later. Last week, the court set a trial date in October 2025 , meaning barring an appeal court overrule, the three companies face funding Venu for over a year with no revenue and the chance it will never launch.

So that’s why yesterday’s Fox Corp. filing was so interesting.  The media company is asking the court to sever part of Fubo’s case against Fox, removing it from the joint litigation that all three defendants are part of.

Fubo is suing the companies not just over Venu, but for their practice of requiring sports channels to be bundled with general entertainment and news channels . The complaint with Venu is that it was allowed to just take the sports channels from the three programmers, something not available to Fubo.

But also Fubo is charging the programmers–long before Venu was a twinkle in their eyes– have for years unfairly tied entertainment channels with sports channels. It is that aspect of the lawsuit Fox wants tried in Los Angeles federal court, and mano y mano , Fubo against just Fox.

“As a matter of basic fairness and due process, Fox should have the chance to defend its distinct circumstances in a separate case held in the venue to which it and Fubo contractually agreed, without having to protect its trade secrets from co-defendant competitors or to face the real risk of jury confusion over the unrelated separate conduct of the other two Defendants,” the company’s lawyers argued in a court filing.

Specifically, Fox points to a forum clause in its Fubo carriage agreement that appears to require litigation between the parties to be litigated in the California federal circuit district in Los Angeles.

But Fox is also clearly uncomfortable with sharing its litigation burden with two of its arch competitors. Typically a concern in litigation is sharing trade secrets with the party on the opposing side of the lawsuit table. Here, that concern is occurring on the same side, too. And if Fox doesn’t want to play nice with WBD and Disney on the carriage agreements side of the lawsuit, how soon before trouble erupts on the Venu side of the case?

Disney and WBD may not have the forum clauses in their carriage agreements, Fox lawyers wrote in their motion, explaining why the two other companies are not looking to move aspects of the litigation out of Judge Margaret Garnett’s courtroom.

That may be part of the motivation of Fox, trying to get out from underneath Judge Garnett’s rule.

An industry source wrote to Awful Announcing that Fox’s motion to transfer the case to California is “disguised forum shopping (seeking a new court that may be more favorable) by Fox. “

“Notably, Fox raised this issue only after the district court issued its order granting Fubo’s preliminary injunction preventing Venu from launching and had never been raised by Fox prior despite ample opportunity,” this source wrote. “The antitrust and preliminary injunction claims are also interrelated, so bifurcating the claims between courts of different states is not appropriate and is not in the public’s best interest. “

It is somewhat unfair to admonish Fox for only filing to sever after Judge Garnett’s preliminary injunction decision given she issued a stay on the case while the parties fought over the injunction. But it underscores that battle ahead over Fox’s move.

Judge Garnett last week asked the parties if the case should be bifurcated, and Fubo’s counsel objected, citing the inter-relatedness of the charges. Judge Garnett said she would not bifurcate if one party opposed (it seems Judge Garnett’s proposal was if she bifurcated the cases would remain in her court)..

Of the three parties, Fox is actually viewed as the one least likely to abandon the Venu ship. Disney has ESPN+ and is launching a direct to consumer platform in August . And WBD has Max, whereas Fox long ago swore off the streaming wars in sports ( Fox Nation is the company’s news streaming outlet). So it has all its sports streaming apples in just the Venu bucket.

Fubo’s reply to Fox’s motion to transfer is due October 7, and Fox’s reply to that is scheduled by October 17.  Given Judge Garnett’s injunction ruling, and her preference not to bifurcate if one party opposes, signs appear to point to another Fubo win here. Would Fox jump ship if it loses this fight? If the SS Venu continues to take on water, one of the three just might do so.

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