The future of Venu Sports remains unclear as U.S. District Judge Margaret Garnett decides whether to grant Fubo a preliminary injunction that would at least delay the launch of the service.
On Tuesday, lawyers for Fubo, Disney, Fox and Warner Bros. Discovery each filed post-trial memoranda outlining their closing arguments. The documents, obtained by TheWrap, were filed after a preliminary injunction hearing last week following Fubo’s antitrust lawsuit filed in February.
The original lawsuit alleges that the three studios have engaged in anti-competitive behavior for years, with their upcoming sports streaming business being the latest example. The complaint also accuses the companies of forcing Fubo to carry dozens of expensive non-sports channels that customers didn’t want as a condition of licensing sports content.
Venu, which is set to launch this fall subject to regulatory approval for $42.99 per month, will target sports fans outside of traditional TV bundles and will be available directly through a new app.
Subscribers can watch thousands of live sports from every major sports league and top college conference, along with access to ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS, truTV and ESPN+. Content includes live game and event coverage from the NFL, MLB, NHL, NBA, WNBA, NCAA Division I football and basketball, US and international soccer, combat sports, Grand Slam tennis, championship golf, INDYCAR, NASCAR, Formula 1 auto racing and more. Subscribers can also bundle Venu with Disney+, Hulu or Max.
In a post-trial memo, Fubo argued that Fox, Disney and Warner “intend to create a monopoly in the skinny sports bundling market.”
Citing internal documents, the company said the service, codenamed “Raptor,” could attract 50% to 67% of subscribers from the pay-TV ecosystem, and noted that incoming Venu CEO Pete Distad’s compensation is based on total subscriber growth and he’s not being incentivized to attract only cord-cutters.
“Without an injunction, Fubo would face bankruptcy. However, there would be literally no harm to the multi-billion dollar media giant if Raptor were delayed for a period of time until the litigation is substantially resolved,” they wrote. “Defendant counsel argued in closing arguments that a delayed launch would likely result in harm, but made no effort to introduce evidence in support of that argument, nor did they present any evidence of the record. Even if they prevail at trial, they would likely suffer nothing beyond a temporary delay.”
But Fox, Disney and Warner argue that they have the right to license their networks to anyone, with or without conditions, and don’t need to help Fubo compile sports programming. The companies point out that Venu subscribers have the option to bundle the service with outside competitors like Peacock and Paramount+, and that the service doesn’t stand in the way of the company’s individual efforts, such as launching its flagship direct-to-consumer version of ESPN in the fall of 2025 or offering a Bleacher Report add-on for Max.
The complaint also argues that Fubo lacks antitrust jurisdiction to sue for harm from increased competition, and that its licensing practices are lawful and irrelevant to Venu’s anticompetitive impact assessment.
“The downstream market for direct-to-consumer sports programming is highly competitive and less concentrated, with many traditional MVPDs and vMVPDs, as well as new DTC and SVOD entrants, and Venu, as a new entrant, would naturally make it less concentrated,” they wrote. “No one expects Venu to capture more than a relatively small market share (even if, as Fubo claims, the market were limited to MVPDs and vMVPDs).”
Additionally, the three argue that consumers can already create their own skinny sports bundles, that Disney has already offered MVPDs smaller package options but rejected them, and that WBD is in the process of negotiating the same. Additionally, they point out that Fubo is contractually obligated to carry non-sports networks from other programming companies at cost, preventing it from offering skinny sports bundles at a competitive price.
The memo also said Fubo’s projections of subscriber loss due to the introduction of Venu were unreliable: Fubo CEO David Gandler testified that the service, which has 1.4 million subscribers, could lose 300,000 to 400,000 subscribers by the end of the year as a result of Venu.
Venu expects to average 1.8 million subscribers by the end of 2025, half of which will come from existing MVPDs, which the companies said would translate to a loss of fewer than 20,000 subscribers for Fubo.
“Even if Fubo’s questionable projections stand up to scrutiny, Fubo has not indicated that any harm is imminent,” they wrote. “Taking the middle ground between the ‘high’ and ‘low’ impact scenarios, Fubo would have more subscribers and higher revenue by the end of 2024 (after the launch of Venu around September 1, 2024) than it had as of June 30, 2024.”
He added that Fubo’s “precarious financial situation” predates the joint venture and has no connection to Venu.
If the court issues an injunction, Fox, WBD and Disney are asking Fubo to post collateral in the form of a $100 million bond to cover expected partnership fees from Venu for the first four months.
Meanwhile, Fubo is receiving support from DirecTV and Dish in its legal battle.
Senators including Bernie Sanders, Elizabeth Warren, Jerry Nadler and Joaquin Castro have also written several letters expressing their concerns about Venu and seeking more information about how the bundle will affect access, competition and choice in the sports streaming market. They have also called for an investigation by the Department of Justice and the Federal Communications Commission.
Fubo’s shares surged more than 8% during Tuesday’s trading session but are still down 48% over the past year, 60% year-to-date and 36% over the past six months.
Pamela Sherrin contributed to this report.
