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On Friday, A U.S. judge temporarily blocked Venu Sports’s launch, a new sports streaming service backed by media giants Walt Disney, Fox, and Warner Bros Discovery. The service aimed to attract younger sports fans who prefer streaming over traditional TV but has faced legal challenges from rival FuboTV.
Antitrust Lawsuit by FuboTV:
In February, FuboTV filed a lawsuit against the media companies, accusing them of antitrust practices that would stifle competition and raise prices for consumers. The judge found that FuboTV’s antitrust claims were likely to succeed and issued an injunction to prevent the launch of Venu Sports, which was scheduled for this fall.
Venu Sports was planned to offer a single app combining thousands of live professional and collegiate sporting events, catering to viewers who want multiple live sports channels without paying for additional entertainment channels.
However, U.S. District Judge Margaret Garnett expressed concerns that Venu’s media partners could monopolize sports rights, limiting competition in the market.
FuboTV’s Position and Market Impact:
FuboTV argued that the media companies hampered its ability to offer a sports-focused streaming service by requiring it to carry non-sports networks that were unpopular with its users.
FuboTV CEO David Gandler emphasized the financial damage the company has suffered due to Venu’s planned launch, noting that FuboTV’s stock price has not recovered since Venu’s announcement.
The three media giants disagreed with the ruling and announced plans to appeal. They defended Venu Sports as a “pro-competitive option” designed to expand consumer choice, particularly among viewers not currently served by existing subscription services.
Market and Industry Implications:
Industry analysts, such as Daniel Konstantinovic of Emarketer, warned that a delayed launch of Venu could cause it to miss out on key opportunities, especially if it fails to debut during the NFL season.
The cost of acquiring professional sports rights continues to rise, driven by their ability to attract large audiences and advertising dollars. Media companies are increasingly seeking new viewers through streaming services to offset the declining revenues from traditional pay TV.
U.S. judge Ruling and Potential Consequences:
Judge Garnett highlighted the serious risks FuboTV faces if Venu is allowed to launch, including imminent subscriber loss, potential bankruptcy, and the collapse of its business.
Despite the ruling, shares of Disney, Fox, and Warner Bros Discovery remained relatively stable in after-hours trading on Friday, with slight increases in their stock prices.
