A federal judge has approved a request by streaming television service Fubo for an injunction that blocks a trio of broadcasters from launching a competing sports-inclusive streaming service.
On Friday, U.S. District Judge Margaret Garnett approved the injunction, which essentially prevents the broadcasters — Fox Corporation, Warner Bros Discovery (WBD) and the Walt Disney Company’s ESPN — from moving forward with plans to launch their service, Venu Sports, later this month.
Fubo sued the broadcasters earlier this year, arguing their plan for Venu Sports was anticompetitive because the service was destined to offer sports-inclusive networks like Fox, ABC, ESPN, TBS, TNT and Tru TV without general entertainment or cable news channels that are typically forced upon other pay TV distributors.
Fubo carries programming from Fox and Disney, including their general entertainment, broadcast and news channels, under terms that are comparable to what are offered to other cable, satellite and streaming services, but different from the arrangement the broadcasters had with Venu Sports.
On Friday, Judge Garnett said the court agreed with Fubo’s characterization that the three broadcaster generally had outsized control over a significant amount of television sports rights for their networks, and that the court was unpersuaded by the broadcaster’s claims that launching Venu Sports would create more competition, not less.
“Irrespective of any agreement between them, though, once the [Venu launches, the broadcasters] have no reason to take actions that could allow for the emergence of direct competitors,” the judge wrote in the order. “Quite the opposite: the multi-year monopolistic runway they have created for themselves will provide powerful incentives to thwart competition and hike prices on both consumers and other distributors.”
The judge said the injunction was warranted because Fubo was likely to prevail on its claims that the broadcasters “will violate this country’s antitrust laws” through Venu Sports, which she said could cause Fubo and American sports fans to “face irreparable harm in the absence of an injunction.”
In a statement, the broadcasters said they “respectfully disagree with the court’s ruling and are appealing it.”
“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,” the broadcasters said in an email to The Desk on Friday. “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 injunction means Venu Sports is unlikely to launch in time for the start of the National Football League’s regular season, when sports fans typically begin to weigh their options for different pay TV services like Fubo and others that offer live access to games. The broadcasters had hoped to launch the service in time to capitalize on that interest, offering a subscription to Venu Sports for $43 per month.
For months, executives at Fubo and lawyers representing the company have argued that they should be afforded the same opportunity to modify their programming packages to eliminate entertainment and news channels that subscribers may not want to pay for.
The company has found some informal backing from executives at other companies, including DirecTV and Dish Network, which have experienced the same effect of rising prices associated with bundled arrangements by which broadcasters force distributors to take non-sports channels as a condition of carrying sports-inclusive networks. DirecTV and Dish Network are not parties to the lawsuit.
“We are pleased with the court decision and believe that it appropriately recognizes the potential harms of allowing major programmers to license their content to an affiliated distributor on more favorable terms than they license their content to third parties,” a spokesperson for DirecTV said in a statement emailed to The Desk on Friday.
