DirecTV and Dish Network parent EchoStar are sounding the alarm on the recent Venu Sports settlement between Fubo and Disney, Fox and Warner Bros. Discovery, warning that they and other distributors will suffer “antitrust injury” due to the decision.
In a letter to U.S. District Judge Margaret Garnett, who granted Fubo a preliminary injunction that blocked Venu’s launch earlier this year, DirecTV said that the settlement restores “an anticompetitive runway” for the joint venture to control the future of the live pay TV market.
In its own letter, EchoStar said that the trio have “purchased their way out of their antitrust violation,” and that Dish, Sling and other distributors will be foreclosed from competing due to the “massive incentive” Fox, Disney and WBD will have to raise programming fees for Venu’s competitors. It added that the trio will be “starving” distributors with “one hand of the skinny sports bundle that they will be supplying to consumers with the other.”
Both DirecTV and EchoStar said they continue to evaluate their options with respect to Venu and the settlement, the anticompetitive harms posed by the joint venture and Disney, Fox and WBD’s “tying practices.” They added that the court should “resist any effort by the Defendants to vacate any prior decision” from the Fubo case.
Fubo, which received a preliminary injunction against Venu in August from Garnett to temporarily block the service’s launch, had accused Fox, Disney and WBD of engaging in a years-long campaign of anticompetitive practices to block its business. It also slammed the trio for forcing it to carry dozens of expensive non-sports channels that its customers don’t want as a condition of licensing sports content.
In addition to Fubo receiving support from Dish and DirecTV, the dispute would become a political football, with a group of Democratic state attorneys general and the Biden administration’s Department of Justice siding with Fubo, while a group of Republican attorneys general sided with Venu.
In her ruling, Garnett determined that Fubo was “likely to succeed in demonstrating that the JV will substantially lessen competition or tend to create a monopoly in contravention of this country’s antitrust laws.”
“If the JV launches, witness testimony and documentary evidence firmly establish that a swift exodus of large numbers of Fubo’s subscribers (both current and reasonably anticipated near-term future subscribers) is likely, and that Fubo’s bankruptcy and delisting of the company’s stock will likely soon follow,” Garnett wrote in her decision. “These are quintessential harms that money cannot adequately repair.”
Fox, Disney and WBD appealed the decision and were set to fight it out in the New York-based Second U.S. Circuit Court of Appeals on Monday. However, that would not proceed after Disney and Fubo revealed that same day the two parties had entered into an agreement to merge the latter service with Hulu + Live TV.
Under the terms of the deal, Disney will take a 70% controlling stake in the combined entity, while Fubo will maintain the remaining 30%. It will be managed by Fubo’s existing team, including CEO David Gandler, and will be governed by a board of directors, with the majority appointed by Disney, as well as independent directors.
As part of the deal, Fox, Disney and WBD will pay Fubo $220 million in cash to settle the litigation against Venu Sports. Disney has also committed to provide a $145 million term loan to Fubo in 2026, which is not contingent upon the deal’s closing. If the deal fails to obtain the necessary shareholder and regulatory approvals and does not close, Fubo will receive a termination fee of $130 million.
Following the closing of the deal in the next 12 to 18 months, Fubo will immediately become cash flow positive, will continue to be publicly traded and will remain available as a standalone offering. By 2028, Fubo projects the combined company will have over $7.5 billion in revenue and adjusted earnings of over $550 million.
The combination of Hulu + Live TV and Fubo is expected to create an entity with a total of 6.2 million subscribers in North America and over $6 billion in revenue, Fubo executives told investors on Monday — making it the second largest virtual multichannel video programming distributor (vMVPD) behind YouTube TV and sixth largest pay TV operator.
DirecTV last reported having around 10 million subscribers, while EchoStar last reported 8.03 million pay TV subscribers, including 5.89 million at Dish TV and 2.14 million at Sling TV. In September, DirecTV and Disney resolved a 13-day carriage dispute that will offer the satellite TV giant’s subscribers access to Disney’s linear networks and streaming services, as well as genre-specific package options, such as sports, entertainment and kids & family.
Fubo shares, which climbed 251% on Monday following the settlement and acquisition announcement, are up 300% in the past five days.
