U.S. Judge Blocks Venu Joint Venture Over Antitrust Concerns
Introduction
In a recent setback for Disney, Warner Bros. Discovery, and Fox, a U.S. judge has temporarily blocked the launch of their joint sports streaming service, Venu. The injunction was granted in response to a lawsuit filed by Fubo TV, alleging that the venture was anticompetitive and would harm its business.
Fubo TV’s Lawsuit
Fubo TV, an internet TV bundle similar to traditional pay TV packages, argued in its lawsuit that Venu would create an unfair advantage for the three media giants. It alleged that the companies would have the power to leverage their dominance in sports rights to favor Venu over competing services.
Dominant Position in Sports Rights
The court filing highlighted that Disney, Warner Bros. Discovery, and Fox collectively control approximately 54% of all U.S. sports rights, and 60% of nationally broadcast sports rights. This gives them a significant advantage in the market for live sports content.
Market Consequences
According to Fubo, the launch of Venu would harm its business by making it more difficult for customers to access sports content outside of traditional pay TV packages. This could lead to a decline in its subscriber base and revenue.
Lawmakers’ Concerns
The lawsuit also received support from lawmakers, including Senator Elizabeth Warren, Bernie Sanders, and Representative Joaquin Castro. In a letter, they expressed concerns about the anticompetitive nature of Venu and urged scrutiny of the venture.
Venu’s Response
In a joint statement, Warner Bros. Discovery, Fox, and Disney’s ESPN expressed disagreement with the court’s ruling and announced their intention to appeal. They argued that Venu is a pro-competitive option aimed at reaching underserved viewers.
Pricing and Content
Venu had announced plans to charge $42.99 per month for access to its sports content. The service would include rights to live sports from the NBA, NHL, MLB, college football and basketball, and other sports. It would also offer access to ESPN, ABC, Fox, TNT, and TBS, as well as ESPN+.
Target Audience
Despite claims that Venu would target sports fans outside of traditional pay TV bundles, Fubo argued that the high price point was likely to maintain the status quo rather than disrupt the market.
Support from Satellite TV Providers
Representatives for DirecTV and EchoStar’s Dish, which offer competing internet TV bundles, also supported Fubo’s lawsuit. They argued that Venu would harm their businesses by giving the three media companies an unfair advantage.
Impact on Consumers
The outcome of this lawsuit has significant implications for consumers. A permanent injunction could prevent the launch of Venu, potentially reducing competition and consumer choice in the market for live sports streaming.
Conclusion
The temporary injunction against Venu highlights growing concerns about the concentration of power in the media industry. Lawmakers and regulators are increasingly scrutinizing mergers and joint ventures that could stifle competition and harm consumers. The outcome of this case will be closely watched as it could set a precedent for future antitrust decisions.
