Court blocks Disney-Fox-WBD sports streaming bundle

The three entertainment companies had sought to create a new streaming service called Venu Sports that would launch this fall and charge $42.99 a month for access to networks across their portfolios, including ESPN, Fox Sports, and TNT. Bundling the sports content from all three companies would put other distributors like Fubo at “an extreme competitive disadvantage,” Fubo said at the time. DirecTV and Dish sided with Fubo in the case.

The deal also raised alarms for lawmakers like Sens. Elizabeth Warren (D-MA), Bernie Sanders (I-VT), and Rep. Joaquin Castro (D-TX), who recently asked federal enforcers to investigate. They warned the joint venture (JV) could put the companies “in a position to exercise monopoly power over televised sports” and effectively require competitors to negotiate with the JV companies “for access to over half of the major sporting licensing rights while simultaneously competing against these companies to offer the best product to broadcast or stream these programs.”

Southern District of New York Judge Margaret Garnett said Fubo would likely succeed on the merits in arguing the deal violates the Clayton Act, with governs mergers and acquisitions, and granted a preliminary injunction blocking it.

“Put simply, the antitrust problem presented by the JV is as follows: if the JV is allowed to launch, it will be the only option on the market for those television consumers who want to spend their money on multiple live sports channels they love to watch, but not on superfluous entertainment channels they do not,” Garnett wrote. “And the JV’s corporate owners—the JV Defendants—are the same players that (1) used their longstanding bundling practices to create the void in the pay TV market tailor-made for the live-sports-only JV to fill, and also (2) exercise near-monopolistic control over the ability for a different live-sports-only streaming service to exist and compete with the JV.”

Fubo co-founder and CEO David Gandler called the decision a victory for both Fubo and 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. The proposed joint venture was only the latest example of anticompetitive practices that The Walt Disney Company, FOX Corp. and Warner Bros. Discovery have consistently engaged in for many years. We believe these practices monopolize the market, stifle competition and cheat consumers from deserved choice.”

Venu Sports did not immediately respond to requests for comment.