FuboTV won another battle this afternoon in its litigation against Walt Disney, Warner Bros. Discovery and Fox when a federal judge denied their motions to dismiss, as well as Fox’s push to move some of its case to a different court.
Fubo is suing the trio most famously over their now stalled sports streaming app, Venu Sports, which the judge who issued today’s rulings also in August slapped a preliminary injunction on. The three media companies are appealing that decision, but today’s hearing focused on other less hyped but just as important allegations in the Fubo lawsuit.
Fubo is suing under the antitrust laws over the industry practice of bundling channels and selling them only that way to video distributors like Fubo, known in legal lingo as tying. The tying allegation, and one for block booking – the practice of requiring distributors to air less desirable shows in return for higher-rated ones – are only charged against Disney and Fox. Fubo dropped WBD’s TBS and TNT in 2020.
And Fubo is suing all three over most favored nation clauses, which when embedded in carriage agreements, require the pay TV programmer, if they sign a deal with a competitor distributor at a lower cost, to adjust the fees downward for all with the MFN provision. Fubo alleges the programmers essentially build in discounts to favored distributors like Hulu, meaning Fubo pays more.
Today’s hearing, which a Fubo representative said walking into court in the morning would last only 90 minutes, ended up consuming most of the day, with the courtroom twice being cleared of media so sensitive commercial contractual terms could be discussed.
Judge Margaret Garnett at the end of the hearing, read her two lengthy opinions, tacking another approximately 45 minutes onto an unexpectedly long day in court. The hearing seemed more like performance art given Garnett’s preliminary injunction ruling, which found that Fubo had made a compelling case.
The chances she would accede to the dismissal motions, a stage of the litigation process that has a low bar for plaintiffs to clear, never seemed likely.
“This is one little mini battle as part of a larger war,” said Corey Martin, managing partner and chair of Granderson Des Rochers entertainment finance practice. “They’re going to try to score some points here with respect to certain arguments that they’re going to put forth.. I can tell you that people don’t view it as performative. And certainly, from the standpoint of the defendants who are paying counsel to prepare briefs, prepare for these hearings, etc, they’re incurring, they’re doing so at a great cost, and thus they must have a pretty strong feeling in terms of the overall arc of the dispute.”
That said, Judge Garnett clearly arrived with most of the decisions already written. She took only a 20-minute break between the close of arguments and reading her decisions.
At the crux of the issue lies bundling, which has survived previous antitrust assaults. One of the most well-known cases is the 2012 Brantley v NBCUniversal decision by the 9th Circuit Court of Appeals that dismissed such a bundling lawsuit from a group of cable subscribers over not being able to buy individual channels.
Judge Garnett noted during oral arguments the Fubo case does not involve subscribers but is between pay TV providers and distributors. Antony Ryan, an attorney for Disney, told her it makes no difference as the core issues remain the same: whether bundling is or not an antitrust violation.
But Judge Garnett, reading her opinion, said Fubo’s allegation is about licensing content from Fox and Disney, not what cable options are available for end-user customers.
Fubo alleges it is prevented from selling a sports-only cable bundle by the defendants’ bundling and other practices. A ruling against bundling, which Judge Garnett seemed to question the legality of in her preliminary injunction decision, would be a lightning bolt to the already besieged pay TV business reeling from cord-cutting.
Judge Garnett, in turning down Fox’s motion to move part of its case to California federal court because of a forum clause in its 2016 Fubo carriage agreement, swung hard at the company. She noted Fox waited seven months into the case, and only after her preliminary injunction ruling, to seek the venue change, suggesting the company was forum shopping. Fox notes that she had stayed motions on the underlying case in the buildup to the preliminary injunction hearing. Judge Garnett acknowledged that, but said Fox could have sent a letter to the court reserving its legal rights, calling it “Fox’s failure.”
Judge Garnett at the end of reading her opinions, said, “No one should draw any conclusions about how I will rule” in the future. She emphasized that in reaching her motion to dismiss decisions legally she had to assume everything the plaintiff alleges is true, which is why many dismissal pushes fail. That is not the case at the summary judgment stage, which comes shortly before trial and is when each side can ask the judge to rule in their favor.
That decision comes with the benefit of discovery, the bulk of which occurs after the motion to dismiss stage. However, in the Fubo case, a significant amount of discovery already occurred in the months leading to the Venu preliminary injunction hearing.
The next steps in the case now focus on discovery, and the buildup to a scheduled October 7, 2025 trial date. There are invariably discovery disputes, challenges to each side’s proposed experts and witnesses, and summary judgment motions coming before the trial.
Meanwhile, the Second Circuit Court of Appeals scheduled a hearing in the Venu appeal for the first week of the new year. Fox, Disney, and WBD had planned to launch Venu in late August before Judge Garnettt’s decision. Venu would stream the three programmers’ 14 sports-related channels, an option other distributors don’t have.
