A federal judge on Friday temporarily blocked the launch of Venu Sports, the forthcoming joint sports streaming venture from Warner Bros. Discovery, Disney and Fox Corporation, dealing a major blow to the effort.
The decision follows a request by Fubo, a smaller rival sports streaming service, for a preliminary injunction against the forthcoming streamer, halting its planned launch just weeks before the start of the NFL season.
“It appears to the Court that Fubo is likely to succeed on its claims that by entering into the [joint venture], the [joint venture] Defendants will substantially lessen competition and restrain trade in the relevant market,” US District Judge Margaret Garnett wrote Friday in the preliminary injunction order.
“It also appears that a balance of equities tips decidedly in favor of Plaintiffs and the public interest would be served by the entering of a preliminary injunction,” she continued.
Fubo filed a lawsuit against the media giants in February over the planned launch of Venu Sports, arguing that the trio were attempting to leverage their sports media rights to edge out competitors, cornering the market in a single, allegedly anticompetitive bundle.
In a joint statement Friday, Disney, Fox and WBD (CNN’s parent company), said they intended to appeal the judge’s ruling.
“We respectfully disagree with the court’s ruling and are appealing it,” the companies 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.”
The forthcoming Venu Sports service, priced at $42.99 per month, was set to offer consumers access to a host of sporting events drawing from each of the media companies’ portfolios, including the NFL, NBA, MLB, NHL, and FIFA World Cup games. It would also feature NASCAR races, UFC matches, and PGA TOUR Golf tournaments.
Fubo’s stock spiked more than 17% on the news Friday. A Fubo spokesperson did not immediately comment on the judge’s decision.
Legacy media companies have been working for years to transition away from relying on the traditional cable bundle and toward profitable streaming services as millions of consumers cut the cord each year, a migration prompted by the rapid rise of Netflix.
After pouring billions of dollars into their own streaming services, the leaders of several major media companies — including Bob Iger, chief executive of ESPN-parent Disney, and David Zaslav, chief executive of Warner Bros. Discovery — have recently signaled to consumers to expect more bundling.
The executives are banking on the prospect that by teaming up they can together take on Netflix and major technology companies, such as Amazon and Apple, that have far deeper pockets.
Iger had hailed Venu’s launch as an “important step forward for the media business” and Zaslav said the partnership “exemplifies our ability as an industry to drive innovation.” Lachlan Murdoch, chief executive of Fox Corporation, said he believed the streamer “will provide passionate fans outside of the traditional bundle an array of amazing sports content.”
CNN’s Oliver Darcy contributed reporting.
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