Walt Disney, Fox, and Warner Bros Discovery are set to argue before the U.S. Court of Appeals on Monday to overturn a ruling that blocked the launch of their joint streaming service, Venu Sports.
The media companies contend that the district court’s injunction, issued on antitrust grounds, unjustly prevents the entry of a low-cost sports streaming service aimed at price-sensitive consumers.
FuboTV, a rival sports streaming platform, sued the companies in February, alleging that Venu Sports would reduce competition and increase prices, violating U.S. antitrust laws. A district court judge sided with Fubo, stating that its claims were likely to succeed and issuing an injunction to temporarily halt Venu’s debut.
“The district court’s injunction forecloses competitive entry, decreases consumer choice and denies consumers lower prices—all with the effect of shielding Fubo from competition,” the media companies stated in a Dec. 9 filing. “The decision should be reversed.”
Central to the case is the practice of bundling, where media companies require distributors like Fubo to carry a mix of channels, including less popular ones, to access premium live sports. Fubo argued that this “forced bundling” hindered its ability to offer a sports-focused service, a restriction lifted for Venu Sports as a joint venture of the media companies.
The Justice Department, joined by New York, Illinois, California, and other states, has urged the 2nd U.S. Circuit Court of Appeals to uphold the injunction. In its brief, the Justice Department supported the district court’s findings that Venu’s formation would limit competition by restricting the ability of other sports-only services to enter the market.
“The district court found that (the media companies) were less likely, after forming Venu, to unbundle that content for other distributors like Fubo wishing to create their own sports-centric offerings,” the Justice Department wrote. “This foreclosure would harm competition in the live pay TV market.”
The media companies collectively control approximately 54% of U.S. sports rights, and the court’s decision is expected to significantly impact the landscape of sports streaming services.
