A federal judge in New York has granted Fubo‘s request for Venu Sports, a planned sports bundle of Disney, Fox Corp. and Warner Bros. Discovery channels, be blocked on antitrust grounds.
Fubo filed a lawsuit in February, blasting Venu as a “cartel” effort to do lasting damage to its growing pay-TV operation.
U.S. District Judge Margaret Garnett issued her ruling (read it HERE) granting a preliminary injunction on Friday afternoon. The decision came after several days of testimony from a number of high-level executives in the media business.
“Once the JV launches, the JV defendants have no reason to take actions that could allow for the emergence of direct competitors,” Garnett wrote. “Quite the opposite: the multi-year monopolistic runway they have created for themselves will provide powerful incentives to thwart competition and hike prices on both consumers and other distributors. But even if the JV defendants swear that such price-hiking and competition excluding will not actually occur (though, as discussed below, there is good reason to believe that it will), one purpose of antitrust injunctions is to prevent anticompetitive incentives from forming in the first place so that American consumers do not have to simply take their word for it
and hope for the best.”
Garnett also noted that the case revolved around the ability to broadcast live sports, which she said “has remained a crucial and irreplaceable source of revenue and power” in the industry.
In a joint statement, the Venu partners expressed their disappointment in the decision. “We respectfully disagree with the court’s ruling and are appealing it,” the statement said. “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. 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.”
Venu, which had been aiming to launch in the coming weeks, announced an initial price of $43 a month, at least $25 less than the cheapest Fubo plan. Launched in 2015 as a sports-focused pay bundle, Fubo has since broadened out but has put sports at the center of its marketing efforts.
Fubo’s stock, which has slumped badly in recent months as Venu has ramped up and approached its planned launch in time for football season, soared after the ruling. It approached the closing bell up 16% for the trading day at $1.52.