Federal Judge Blocks Venu Launch

Fox Corp., Warner Bros. Discovery Inc. and Walt Disney Co. were blocked by a judge from launching their streaming sports service one week before its rollout, taking a blow from their smaller rival FuboTV Inc.

Bloomberg reports US District Judge Margaret Garnett on Friday issued a preliminary injunction blocking the $42.99-a-month service, Venu Sports, from going forward while Fubo’s lawsuit against the three companies proceeds.

The three companies “exercise near-monopolistic control over the ability for a different live-sports-only streaming service to exist and compete with” them, Garnett wrote in her ruling.

The ruling in Manhattan is a victory for Fubo, which argues that the new venture — set to start Aug. 23 — would prevent competitors from offering a similar “skinny bundle” of sports channels and raise prices for consumers. Fubo says its business would be destroyed if subscribers flee to Venu.

The judge sided with Fubo, saying that once the proposed streaming service launches, they will “have no reason to take actions that could allow for the emergence of direct competitors.”

Losing Users

The new service comes as more and more viewers have jettisoned increasingly costly cable and satellite TV packages in favor of lower-priced alternatives.

The pay TV industry lost almost 30 million users from 2015 to 2023 and could shed another 6 million by the end of the year, according to a report on Venu by Bloomberg Intelligence. Industry leader ESPN, controlled by Disney, has seen its subscriber count fall to 71 million last year from 100 million in 2010.

Fubo sued Fox, Warner and Disney in February, right after they announced they were joining forces to launch Venu. The company argued the trio was using their control of valuable rights to major sporting events to assert control over the market. Fubo claimed they were forcing rivals to license and distribute a big bundle of less popular general entertainment channels if they wanted to carry networks such as ESPN and Fox.

Garnett ruled after more than a dozen witnesses testified at a weeklong hearing, including Fubo CEO David Gandler, who told the judge he expects “the floodgates will open” once the new service starts operating and that subscribers will abandon Fubo.