The future of Venu Sports hangs in the balance as U.S. District Judge Margaret Garnett will decide on whether to grant Fubo a preliminary injunction that would, at the very least, delay the launch of the service.
On Tuesday, lawyers for Fubo and Disney, Fox and Warner Bros. Discovery each filed post-trial memos making their final arguments. The documents, obtained by TheWrap, come after a preliminary injunction hearing was held last week in response to Fubo filing an antitrust lawsuit in February.
The initial suit alleges that the trio of studios have engaged in a years-long campaign of anticompetitive practices, with the upcoming sports streaming venture being the latest example. The complaint also slams the trio for forcing Fubo to carry dozens of expensive non-sports channels that its customers don’t want as a condition of licensing sports content.
Venu, which is slated to launch this fall at $42.99 per month subject to regulatory approval, is targeted at sports fans outside of the traditional TV bundle and will be available directly through a new app.
It will offer subscribers thousands of live sports from all the major sports leagues and top college conferences with access to ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS, truTV, as well as ESPN+. Content will include live game and event coverage of the NFL, MLB, NHL, NBA, WNBA, NCAA Division I football and basketball, U.S. and international soccer, combat sports, Grand Slam tennis, championship golf, INDYCAR, NASCAR, F1 auto racing and more. Subscribers will also be able to bundle Venu with Disney+, Hulu or Max.
In its post-trial memo, Fubo argued that Fox, Disney and Warner “intend to create a monopoly in the skinny sports bundle market.”
The company cited internal documents that the service, codenamed Raptor, is likely to attract 50% to 67% of its subscribers from the pay-TV ecosystem. It also noted that incoming Venu CEO Pete Distad’s compensation is based on total subscriber growth and that he’s not encouraged to solely attract cord cutters.
“Fubo will face insolvency absent an injunction. But there is literally no harm to multibillion media giants if Raptor is delayed for some period of time while the merits of the case can be fully resolved,” they wrote. “While Defendants’ lawyers argued in summation that a delayed launch might cause harm, they made no efforts to introduce evidence that could support that argument and they pointed to no record evidence. They will not suffer anything other than a temporary delay, assuming they prevail at trial.”
But Fox, Disney and Warner argue that they are entitled to license their networks to anyone on any terms — or no terms at all — and that they are not required to help Fubo assemble a skinny sports bundle. The company points out that Venu subscribers have the option of bundling the service with outside competitors like Peacock or Paramount+ and that the service does not disrupt the company’s separate efforts, such as the launch of a flagship direct-to-consumer version of ESPN in fall 2025 or Max offering a Bleacher Report add-on.
It also argues that Fubo lacks antitrust standing to complain about any injury from increased competition, arguing that their licensing practices are both lawful and irrelevant to assessing the anticompetitive effects of Venu.
“The downstream market for distribution of sports programming to consumers is competitive and unconcentrated, with many traditional MVPDs and vMVPDs, as well as new entries from DTCs and SVODs. Venu will be another new entrant, which by definition reduces concentration,” they state. “No one expects Venu to earn more than a relatively small market share (even if, as Fubo contends, the market were limited to MVPDs and vMVPDs).”
Additionally, the trio argues that consumers can already create their own skinny sports bundles and that Disney has already offered the option for smaller packages to MVPDs but they have declined, while WBD is negotiating to do the same. They further noted that Fubo is contractually obligated to carry non-sports networks from other programmers at a cost that prevents it from offering a skinny sports bundle at a competitive price.
Their memo also said that Fubo’s projections of alleged subscriber losses due to the launch of Venu lacks credibility. Fubo CEO David Gandler testified that the service, which has 1.4 million subscribers, could bleed 300,000 to 400,000 of them by the end of the year because of Venu.
Venu projects to have an average of 1.8 million subscribers by the end of 2025, with only half from existing MVPDs. The trio states that would equate to a loss of less than 20,000 subscribers for Fubo.
“Even if Fubo’s dubious projections withstood scrutiny, Fubo has not shown that any harm is imminent,” they wrote. “Taking the midpoint of its ‘high’ and ‘low’ impact scenarios, Fubo will have more subscribers and higher revenue at year-end 2024 (following a launch of Venu around Sept. 1, 2024) than it did at June 30, 2024.”
They also added that Fubo’s “precarious financial condition” predates the JV and has nothing to do with Venu.
If the court issues an injunction, Fox, WBD and Disney have requested that Fubo be required to post a security in the form of a $100 million bond to cover the expected affiliate fees from Venu over the first four months.
Meanwhile, Fubo has received support from DirecTV and Dish in its legal fight.
Lawmakers including Bernie Sanders, Elizabeth Warren, Jerry Nadler and Joaquin Castro have also issued several letters expressing concerns about Venu and asking for more information on how the bundle could impact access, competition and choice in the sports streaming market. They’ve also urged the Department of Justice and Federal Communications Commission to investigate.
Shares of Fubo surged over 8% during Tuesday’s trading session, but are down 48% in the past year, 60% year to date and 36% in the past six months.
Pamela Chelin contributed to this reporting.
