A federal judge on Friday temporarily blocked ESPN, Fox, and Warner Bros. Discovery from launching their planned new Venu Sports streaming service in the fall.
FuboTV filed a motion to request a preliminary injunction as part of an antitrust lawsuit filed in February. The competitor argued that the media companies behind the joint venture were using their dominance on sports content to extract billions of dollars in profits, which would ultimately harm consumers.
“Fubo is ultimately likely to succeed in demonstrating that [Venu Sports] will substantially lessen competition or tend to create a monopoly in contravention of this country’s antitrust laws,” Garnett wrote.
FuboTV initially launched in 2015 as a sports-focused streaming service, but says it became bloated with other “bundled” content it was forced to accept as part of its licensing agreements with ESPN, Fox, and Warner Bros.
The company argued in court that these agreements forced “Fubo to spend hundreds of millions of dollars to license and broadcast content that its customers do not want or need.”
The company claims that the launch of Venu Sports, which will focus only on live sports as FuboTV set out to, will be more appealing to its subscribers. Therefore, the joint venture’s launch will harm FuboTV’s business, potentially driving it to bankruptcy.
FuboTV argues that the joint venture will have near-monopolistic control over live sports broadcasting rights, making it difficult for Fubo and other competitors to survive.
FuboTV also claims that its business has been hurt by “bundling” practices, where it is forced to carry and pay for non-sports channels as a condition to access sports channels from these large companies.
The media giants behind Venu Sports argued that the new streaming service is pro-competitive and that FuboTV’s problems stem from its own business challenges, not from the formation of Venu Sports.
They also defended bundling as a legal and standard industry practice.
The judge said that Venu Sports could potentially dominate the market, especially given that its owners control the majority of live sports broadcasting rights. She said there is a likelihood Venu Sports might use its market power to eliminate competition and increase prices, which could harm consumers and other distributors.
Fubo co-founder and CEO David Gandler hailed the ruling as a victory for the company and U.S. consumers.
“This decision will help ensure that consumers have access to a more competitive marketplace with multiple sports streaming options,” he said in a statement. “But our fight continues. Fubo has said all along that we seek equal treatment from these media giants, and a level playing field in our industry.”
“A fair and competitive marketplace is necessary to provide consumers with multiple, robust, and more affordable sports streaming options,” Gandler continued. “We will continue to fight for fairness and for what’s best for consumers.”
ESPN, Fox, and Warner Bros. Discovery issued a joint statement, saying they intend to appeal the ruling.
“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,” their statement reads.
“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 preliminary injunction prevents Venu Sports from launching while the case plays out.
