Judge Temporarily Blocks Sports Streamer Venu, Siding With Fubo

A US judge has temporarily blocked media companies Disney, Warner Bros. Discovery AND Fox since the launch of their sports streaming service, Venu, according to court documents.

The temporary injunction, granted in response to a lawsuit filed by FuboTVIt comes just weeks before the start of the National Football League season. The companies had planned to launch their service by then.

Fubo, an Internet TV package similar to traditional pay-TV packages, argued in its lawsuit that Venu was anticompetitive and would disrupt its business. Fubo shares jumped 16% on Friday on news of the injunction.

“Today’s ruling is a victory not only for Fubo but also for consumers. This decision will help ensure that consumers have access to a more competitive marketplace with multiple sports streaming options,” Fubo CEO David Gandler said in a press release following the court’s decision.

Warner Bros. Discovery, Fox and Disney’s ESPN announced the joint venture streaming service in February. Shortly thereafter, Fubo filed an antitrust lawsuit against the venture.

On Friday, Fubo said it plans to pursue antitrust lawsuits against the companies for their anticompetitive practices. In recent months, lawmakers including Sen. Elizabeth Warren, D-Mass.; Sen. Bernie Sanders, I-Vt.; and Rep. Joaquin Castro, D-Texas, have sent a letter pushing to review Venu.

“We respectfully disagree with the court’s ruling and will appeal,” Warner Bros., Disney’s Discovery, Fox and ESPN said in a joint statement Friday.

“We believe Fubo’s arguments are flawed as a matter of fact and law, and that Fubo has failed to demonstrate that it is legally entitled to a preliminary injunction. Venu Sports is a pro-competitive option that aims to improve consumer choice by reaching a segment of viewers who are currently underserved by existing subscription options.”

Earlier this month, Venu announced a price of $42.99 per month.

The service would offer the full suite of live sports rights owned by its parent companies, which includes the National Basketball Association, National Hockey League, Major League Baseball, college football and basketball, among others. Venu subscribers would also have access to 14 traditional sports networks from its parent companies, including ESPN, ABC, Fox, TNT and TBS, as well as the ESPN+ streaming service.

High pricing is a common feature when it comes to live sports streaming, so it doesn’t change distribution deals with traditional pay-TV distributors.

In court documents, U.S. Judge Margaret Garnett noted that the three companies control approximately 54 percent of all U.S. sports rights and at least 60 percent of all nationally broadcast sports rights in the United States.

“There is significant evidence in the record that indicates the actual figures may be even higher,” Garnett said in court documents.

“This means that Disney, Fox and [Warner Bros. Discovery] are all major players in live sports licensing, otherwise competing with each other both to secure sports broadcast rights and to attract viewers to their live sports programming. But together, they are dominant,” Garnett said in his decision.

Outside of these companies, By Paramount Global CBS and By Comcast NBC is the other major sports rights holder in the United States. Streaming services, such as by Amazon Prime Video has also started offering live sports exclusively.

Traditional pay TV providers have been losing customers at a rapid pace, moving to streaming services and abandoning the notoriously expensive bundle. Meanwhile, companies like Fubo, a streaming option in the bundle, have seen their prices rise due to the high programming costs associated with the networks they operate.

Until now, Venu’s marketing has been based on an initiative to reach sports fans outside of the traditional pay-TV bundle.

But Fubo’s lawsuit argues that the sports streaming service violates antitrust laws and represents the latest example of anticompetitive behavior by the three media companies.

A multi-day hearing was held last week, attended by representatives of Fubo, as well as satellite TV package providers DirecTV and By EchoStar Dish, which also offers competing Internet TV packages and supported Fubo in the lawsuit, argued that the streaming bundle would be harmful to their business.

During the hearing, a lawyer for Warner Bros. Discovery told the judge that an injunction would “fire” Venu, Front Office Sports reported.

“This ruling is a huge win for consumers and for competition in the video market,” Jeff Blum, EchoStar’s executive vice president of external and government affairs, said in a statement.

“We are pleased with the court’s decision and believe it adequately recognizes the potential harm that comes from allowing major programmers to license their content to an affiliated distributor on more favorable terms than they would to third parties,” DirecTV said in a statement Friday.

Disclosure: Comcast owns NBCUniversal, the parent company of Vscek.