Disney’s ESPN, Fox Corp. and Warner Bros. Discovery have thrown in the towel on their joint sports streaming service, Venu Sports, a venture that was first announced last February.
The three would-be collaborators acknowledged the decision to walk away from Venu in a statement released this morning. “After careful consideration, we have collectively agreed to discontinue the Venu Sports joint venture and not launch the streaming service,” the statement read. “In an ever-changing marketplace, we determined that it was best to meet the evolving demands of sports fans by focusing on existing products and distribution channels.”
The move to fold up the tent came at the close of a week marked by Disney’s deal to merge its Hulu + Live streamer with Fubo TV, which in turn brought a tidy end to the latter’s legal challenge against the Venu partners. The withdrawal of Fubo’s lawsuit raised eyebrows at DirecTV and Dish Network, which responded to the news by firing off separate letters to United States District Court Judge Margaret M. Garnett in New York.
The satcasters’ complaints suggested that while Disney may have made nice with Fubo, the new arrangement did very little to dispel the competition concerns that had prompted Fubo’s suit in the first place.
“Defendants have paid [the] plaintiff to ensure cooperation from an aggrieved competitor, but the settlement does nothing to resolve the underlying antitrust violations at issue,” DirecTV general counsel Michael Hartman wrote Thursday in a two-page missive to Garnett. “Instead, this settlement restores ‘an anticompetitive runway for the JV defendants to control the future of the live pay TV market.’”
The DirecTV letter was sent the day after Dish parent EchoStar requested that the Southern District of New York preserve its legal and factual findings in the matter. The request is intended to bolster the potential precedential impact of the case on market competition.
Hartman didn’t pull any punches, suggesting Disney had effectively bought off Fubo in a bid to clear the runway for the Venu launch. “By this settlement, the defendants pay off and seek to subsume the very competitor that raised these antitrust violations to the court,” he wrote in the Jan. 9 letter. “However, [they] cannot purchase their way out of the antitrust violations.”
A day earlier, EchoStar’s counsel addressed Judge Garnett in a letter that closed with a note that Dish was evaluating its legal options. The attorney opined that the settlement appeared to be “designed to eliminate court jurisdiction over this multifarious harm by effectuating the preliminary injunction’s expiration, rather than addressing the underlying competition issues.”
EchoStar’s legal rep went on to accuse Disney of securing Fubo’s silence with a “$220 million payment (plus a $145 million loan).”
Fubo filed its antitrust complaint last April, kicking off a high-profile case intended to block the release of Venu. In August, Judge Garnett granted Fubo’s motion for a preliminary injunction to bar the three media partners from moving forward with their streaming startup.
One likely contributing factor to the decision to discontinue Venu is that Fubo’s litigation against the joint venture delayed the launch, which in turn changed how each company assessed the pros and cons of Venu versus other business pursuits—including those that were contractually foreclosed by their involvement in Venu.
The U.S. Court of Appeals for the Second Circuit had been scheduled to hear oral arguments in the Fubo case on Jan. 6. However, on that very same date, the principals informed Judge Garnett that they’d resolved their dispute and stipulated that the case and injunction be dismissed.
Antitrust litigations are notoriously slow-moving. In the rapidly evolving marketplace of streaming services, the pile-up of legal hangups and logistical logjams undermined Venu’s core business proposition.
Venu responded to the challenges of launching a new sports streamer with headlong momentum, landing former Apple exec Pete Distad to serve as CEO last March before setting a launch target and an opening subscription rate of $42.99 per month. So bullish were the partners on the venture that they began pitching potential advertising clients during last spring’s upfront bazaar.
It was not to be, and the winding down has already begun. The partners signed off by asserting they “are proud of the work that has been done on Venu to date, and grateful to the Venu staff, whom we will support through this transition period.”
As Venu passes into what-might-have-been, Disney returns its laser focus to ESPN’s fall direct-to-consumer launch. The yet-to-be-branded offering (code name: “Flagship”) is set to roll out ahead of the 2025 college football season.
In response to the announcement of Venu’s demise, a spokesperson for DirecTV on Thursday expressed in a statement that the company “remains a leader in sports” and “look[s] forward to working with our programming partners—including Disney, Fox and Warner Bros. Discovery—to compete on a level playing field to deliver sports fans more choice, control, and value all-in-one experience.”
This story has been updated.
