After nearly a year of uncertainty brought on by a significant legal battle, the three broadcasters involving in the streaming joint venture Venu Sports have called off their plans to launch the service.
On Friday, the Walt Disney Company’s ESPN, Fox Corporation and Warner Bros Discovery (WBD) issued a joint statement saying their decision to move away from Venu Sports was made “after careful consideration.”
“In an ever-changing marketplace, we determined that it was best to meet the evolving demands of sports fans by focusing on existing products and distribution channels,” the statement said. “We are proud of the work that has been done on Venu to date and grateful to the Venu staff, whom we will support through this transition period.”
First announced in February of last year, the three broadcasters intended to launch Venu Sports with their sports-inclusive channels like ABC, Fox, ESPN, Fox Sports 1, TBS, TNT and Tru TV, but without their general entertainment or news networks.
The plan to distribute sports-only channels through a streaming service set it apart from how those networks are typically offered to consumers: Through cable and satellite services, which are usually required to carry a mixture of channels and whose distribution contracts with the broadcasters ultimately result in high subscriber fees.
From the moment its plans were laid out, Venu Sports seemed to invite trouble. Streaming competitor Fubo quickly filed a lawsuit on antitrust grounds, saying the broadcasters were offering Venu Sports more-favorable distribution terms than what they and other pay TV providers were forced to accept for the privilege of carrying sports networks.
The broadcasters had intended to launch Venu Sports last August, timed to coincide with the start of the National Football League’s regular season, but a federal judge overseeing the antitrust case blocked its debut by granting Fubo a preliminary injunction.
The antitrust case ended this week when Disney and Fubo agreed to merge their respective pay TV businesses. But Venu Sports’ precarious legal situation was far from over, with DirecTV and Dish Network quickly affirming their willingness to present a united front and continue the legal battle in some other way.
A source familiar with the company’s plans said DirecTV and Dish Network’s threat to continue the legal battle played a small factor in the decision to dissolve the Venu Sports joint venture. The broadcasters ultimately came to the realization that Venu Sports had the potential to complicate distribution deals with them and others, after at least two large pay TV providers approached one of the media companies with a demand to renegotiate their distribution agreement by invoking their “most-favored nations” clause, the source said.
Less clear is what will happen to around a dozen executives that were hired to support the development and launch of Venu Sports. The broadcasters hired former Apple and Hulu executive Pete Distad to serve as the CEO of the venture, and other executives left jobs at SiriusXM, FanDuel and the Los Angeles Rams to support the Venu Sports effort.
Some industry groups are already celebrating the move, including ACA Connects, a trade organization that represents small- and medium-sized cable TV operators.
“First and foremost, this is a win for sports fans,” Grant Spellmeyer, the CEO of ACA Connects, said in a statement e-mailed to The Desk. “They refused to be fooled. The media giants behind this sports streaming juggernaut threatened to control the marketplace so they could jack up prices and force consumers to pay for bloated bundles of programming. ACA Connects has long advocated for a more competitive and level playing field. That starts with allowing everyone, not just the biggest media players, to offer their customers the programming they want at prices they can afford.”
DirecTV seems pleased with how things ended as well.
“DirecTV remains a leader in sports, and we look forward to working with our programming partners – including Disney, Fox and Warner Bros. Discovery – to compete on a level playing field to deliver sports fans more choice, control, and value all-in-one experience,” a spokesperson said.
