For nearly a year, satellite TV giants Dish Network and DirecTV provided sideline support to streaming sports service Fubo as it pursued an antitrust lawsuit against the Walt Disney Company and two other broadcasters over their plans to launch a competing service called Venu Sports.
The companies and its executives filed briefs in support and provided testimony through deposition that backed Fubo’s assertion that Venu Sports violated antitrust laws because the service intended to distribute sports-only channels from the broadcasters without onerous carriage terms that are forced on cable, satellite and cable-like streaming services, which drive up the prices of those products.
Things changed dramatically on Monday, when Fubo and Disney announced a marriage that will effectively merge their respective pay TV businesses, stunning the media and entertainment industry and effectively bringing an end to Fubo’s legal action against the three broadcasters, clearing the way for Venu Sports to launch.
Not so fast, DirecTV and Dish wrote in letters filed in federal court on Tuesday. While the original case brought by Fubo might be concluding, there are still numerous legal concerns with the development and launch of Venu Sports, including the ones originally mention by Fubo and its executives before they sold out to Disney.
“Defendants [Disney] have paid Plaintiff [Fubo] to ensure cooperation from an aggrieved competitor, but the settlement does nothing to resolve the underlying antitrust violations at issue,” a letter written by an attorney representing DirecTV said.
In eloquent legalese speak, the attorneys for DirecTV and Dish accused Disney of paying off Fubo so that it could move forward with the launch of Venu Sports, unencumbered by an antitrust case that already delayed the launch of the service once before and which Fubo was almost certainly going to win.
An attorney for Dish Network wrote that dismissal of Fubo’s lawsuit was unavoidable because of existing federal law, but reminded the court of a previous ruling at an early stage of the case that characterized the development of Venu Sports as planned by Disney, Fox Corporation and Warner Bros Discovery (WBD) as anticompetitive.
“The Court’s decisions stand despite the dismissal; they may not, and should not, be vacated or diminished in any manner,” the attorney for Dish Network wrote in their letter.
Both letters affirmed DirecTV and Dish Network are evaluating their legal options now that the Fubo case is settled, suggesting either company may bring a separate or joined action that challenges the marriage of Fubo and Disney’s pay TV businesses at some point in the near future.
That action could be complicated on DirecTV’s end: The company was forced to pull ESPN, ABC and other Disney-owned channels last year after a distribution agreement with the broadcaster expired. According to DirecTV, Disney requested an agreement from the pay TV company that it would no longer characterize its distribution deals as “anticompetitive.” A deal was reached about two weeks later, and while officials at DirecTV declined to say whether they accepted that specific term, people familiar with the negotiations say DirecTV is largely restrained from legally targeting Disney on the basis of its distribution deals under its current distribution agreement. (DirecTV is still pursuing a case against Disney at the Federal Communications Commission over the so-called “clean slate” agreement.)
Things are different for Echostar, the parent company of Dish Network and streaming service Sling TV, which faced a similar distribution dispute with Disney in 2022. That situation was resolved with a “clean slate” agreement, but no term that prevents Echostar from legally challenging Disney’s distribution agreements with others, including Venu Sports.
Both companies are exploring whether Echostar should file a direct case against the broadcasters operating Venu Sports, which would effectively pick up where Fubo left off. A second potential approach is being considered, which would see Dish and DirecTV sue to block Fubo and Disney’s pay TV merger on antitrust grounds — the same legal argument that Fubo raised in its quest to prevent Venu Sports from launching — according to a source at one of the satellite companies who spoke with The Desk by text message on Thursday.
If the latter happens, Dish and DirecTV will shift from supporting Fubo to turning against it, and the companies are likely to rely upon many of the original legal arguments that Fubo raised in its now-dissolved legal challenge against Disney.
