Venu Sports, a joint sports streaming venture backed by Disney, Fox and Warner Bros. Discovery, filed a lawsuit in a federal appeals court seeking permission to resume its planned launch of the service.
The company’s brief, filed late Friday with the U.S. Court of Appeals for the Second Circuit, comes months after pay-TV operator Fubo filed an antitrust lawsuit alleging that the media giants are trying to use Venu to put Fubo and other distributors out of business. Last month, a New York judge sided with Fubo and surprised the media industry by granting the company’s request for a preliminary injunction to block Venu’s debut.
“Programmers are caught in a perfect storm: increased competition is driving up content costs while decreasing revenues,” Venu said in the report. “To weather this storm, programmers have taken steps to diversify their delivery methods.” (Read the full report here.)
The appeal primarily concerns the injunction and Venu’s ability to begin operating as a commercial entity, but the underlying litigation has broader implications: Venu stakeholders — and, by extension, Comcast/NBCUniversal, Paramount Global and other programming companies — face potentially damaging legal risks as they continue to juggle their streaming businesses with traditional linear businesses that have suffered long-term declines.
Fubo has until November 4 to file its response to Venu’s appeal.
Venu argues that U.S. District Judge Margaret Garnett’s ruling “protects Fubo from increasing competition by denying consumers new, lower-cost, innovative products – the exact opposite of what antitrust law is intended to achieve.”
By offering 16 linear networks from Disney, Fox and WBD for $43 per month, Venu will “increase production and lower prices,” the summary argues. “Fubo (a competitor) may not like it, but consumers will.”
Venu argues that this is simply “one more way Defendants are seeking to combat the steep decline in MVPD subscriber numbers by diversifying how they deliver their network to consumers.” Venu targets cord-cutters and cord-nevers, particularly younger customers, so the service will complement its main paid plans, the brief adds.
In its complaint and testimony in district court, Fubo argued that it had tried multiple times over the years to launch a sports-focused bundle like Venu, but was repeatedly rejected by Disney, Fox and WBD. Forced to carry additional non-sports networks, Fubo raised its prices, nearly doubling Venu’s $43 up-front fee. In its broadcast-rights battle with Disney earlier this month, DirecTV cited Fubo’s complaint in filing an amicus brief in support of the pay-TV distributor. Sling TV parent Dish Network also filed an amicus brief.
With specific reference to Garnett, the court argues that Venu “has never defined which products fall within the ‘skinny sports bundle segment.'” Nor did the district court explain why certain products currently available to consumers (such as various SlingTV sports packages) are excluded from the skinny sports bundle segment. Despite these deficiencies, the district court granted the injunction based on its conclusion that Venu “monopolizes” this market segment. But without defining the relevant antitrust market, the court cannot reach a conclusion as to whether Venu monopolizes anything, nor can it properly evaluate whether defendants’ conduct harms competition.”
