A federal judge in New York has granted Fubo’s request for Venu Sports, a planned sports bundle of Disney, Fox Corp. and Warner Bros. Discovery channels, be blocked on antitrust grounds.
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Fubo filed a lawsuit in February, blasting Venu as a product of a monopolistic “cartel” intent on crushing any competitors. With 1.45 million subscribers, Fubo is a middle-of-the-pack pay-TV provider but unique for its focus on sports.
U.S. District Judge Margaret Garnett issued her ruling (read it HERE ) granting a preliminary injunction on Friday afternoon. The decision came after several days of testimony from a number of high-level executives in the media business.
“Once the JV launches, the JV defendants have no reason to take actions that could allow for the emergence of direct competitors,” Garnett wrote. “Quite the opposite: the multi-year monopolistic runway they have created for themselves will provide powerful incentives to thwart competition and hike prices on both consumers and other distributors. But even if the JV defendants swear that such price-hiking and competition excluding will not actually occur (though, as discussed below, there is good reason to believe that it will), one purpose of antitrust injunctions is to prevent anticompetitive incentives from forming in the first place so that American consumers do not have to simply take their word for it and hope for the best.”
Garnett also noted that the case revolved around the ability to broadcast live sports, which she said “has remained a crucial and irreplaceable source of revenue and power” in the industry. She acknowledged that a preliminary injunction is “one of the most powerful tools in the arsenal of judicial remedies,” but affirmed that Fubo had cleared that high bar with its argument.
In a joint statement, the Venu partners expressed strong disappointment in the decision. “We respectfully disagree with the court’s ruling and are appealing it,” the statement said. “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.”
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Fubo says it plans to continue pursuing its lawsuit given its broader claims about competition. A date has not yet been set for the main antitrust trial.
“Today’s ruling is a victory not only for Fubo but also for consumers,” CEO David Gandler said. “This decision will help ensure that consumers have access to a more competitive marketplace with multiple sports streaming options.”
He went on to assert that Venu is “only the latest example of anticompetitive practices that The Walt Disney Co., Fox Corp. and Warner Bros. Discovery have consistently engaged in for many years. We believe these practices monopolize the market, stifle competition and cheat consumers from deserved choice.”
Venu, which had been aiming to launch in the coming weeks, announced an initial price of $43 a month, which is $36 less than the cheapest Fubo plan. In one internal Venu document introduced in the hearings last week, the JV partners described an “ocean of opportunity” between the pay-TV services in the $70 to $80 monthly price range and subscription streamers like Netflix, Peacock and Disney+ in the $7 to $10 range. Launched in 2015 with primarily sports programming, Fubo has since broadened out but kept sports at the center of its marketing efforts. At the heart of its lawsuit is its assertion that programmers, notably the three companies named in the suit, required it to take additional non-sports channels in order to gain access to sports offerings. That, in turn, forced prices to rise, Fubo says.
Fubo’s stock, which has slumped badly in recent months as Venu has ramped up and approached its planned launch in time for football season, soared after the ruling. It closed up nearly 18% for the trading day at $1.54.
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