Court blocks Disney, Fox, WBD sports streaming bundle

The three entertainment companies were looking to launch a new streaming service called Venu Sports this fall that would offer access to their networks, including ESPN, Fox Sports and TNT, for $42.99 per month. Fubo said at the time that bundling the three companies’ sports content would put other distributors like Fubo at a “significant competitive disadvantage.” DirecTV and Dish sided with Fubo in the lawsuit.

The deal has also alarmed lawmakers such as Sen. Elizabeth Warren (D-Mass.), Sen. Bernie Sanders (I-Vermont), and Rep. Joaquin Castro (D-Texas), who recently called for a federal enforcement investigation. The lawmakers warned that the joint venture (JV) could put the companies “in a position to exercise monopoly power in televised sports,” effectively forcing competitors to “negotiate with the JV companies for access to more than half of the major sports licensing rights, while simultaneously competing with these companies to offer the best product to broadcast or stream these programs.”

Judge Margaret Garnett of the Southern District of New York issued a preliminary injunction blocking the acquisition, arguing that Fubo violated the Clayton Act, which regulates mergers and acquisitions, but said the argument was likely to succeed.

“Simply put, the antitrust problems presented by this joint venture are as follows: If permitted to form, the joint venture will be the only option in the marketplace for television viewers who want to watch multiple live sports channels they want to watch, but don’t want to pay for extra entertainment channels they don’t watch,” Garnett wrote. “And the corporate owners of the joint venture – the joint venture defendants – are the same companies that (1) used long-standing bundling practices to create a vacuum in the pay-TV market for the live sports-only joint venture, and (2) have near-monopolistic control over the ability of other live sports-only streaming services to exist and compete with the joint venture.”

Fubo co-founder and CEO David Gandler called the decision a victory for both Fubo and consumers. “This decision will help ensure consumers have access to a more competitive marketplace with multiple sports streaming options,” he said in a statement. “But our fight continues. Fubo has always said we want equal treatment from these media giants and a level playing field within the industry. The proposed joint venture is just the latest example of long-standing and consistent anti-competitive practices by The Walt Disney Company, FOX Corporation and Warner Bros. Discovery. We believe these practices monopolize markets, stifle competition, and deprive consumers of the choice they deserve.”

Venu Sports did not immediately respond to a request for comment.