Venu Sports, the joint streaming venture between Disney, Fox, and Warner Bros. Discovery, is seemingly in for an uphill battle in court.
Per a report by Eriq Garnder of Puck, the Department of Justice’s antitrust division is preparing an amicus brief in support of U.S. District Court Judge Margaret Garnett’s injunction on the yet-to-be-launched streaming service. The August ruling blocked Venu’s planned launch before football season and is now being appealed by the trio of media companies.
Judge Garnett, and apparently the DOJ, contend that Venu’s plan to sell what the industry refers to as a “skinny bundle” of primarily sports-focused channels amounted to anti-competitive behavior.
Traditionally, content providers like Disney, Fox, and WBD have forced distributors like Fubo, who brought the lawsuit, to bundle less popular channels like National Geographic or Animal Planet to receive more popular sports channels like ESPN or TNT. Venu seeks to sell a package of channels catered specifically to sports fans, rid of the dead weight forced onto other pay-TV providers, and undercut those providers in the process.
The fear among regulators is that if Venu can offer a “skinny bundle” while others cannot, it will be impossible for other pay-TV providers to compete, and would give Venu a “monopolistic runway” where they could start charging consumers whatever they wanted after reaching widespread adoption.
The dispute seems to be drawing the interest of lawmakers as well. Before Judge Garnett’s ruling in August, three Democratic lawmakers — Senator Elizabeth Warren, Senator Bernie Sanders, and Representative Joaquin Castro — sent a letter in support of Fubo, urging the DOJ to block Venu. Now, three Republican lawmakers — Representative Jim Jordan, Representative Darrell Issa, and Senator Lindsey Graham — have reportedly filed an amicus brief in support of Venu.
Disney, Fox, and WBD have urged the court to move quickly on the case, with Gardner suggesting in his report that the companies are eyeing a launch before next year’s NCAA Tournament. He also floats the idea that the Venu trio could be eyeing a trip to the Supreme Court. That path would cut against the conventional wisdom that Disney might be throwing in the towel on Venu altogether ahead of launching its own direct-to-consumer streaming service next year.
Of course, the backdrop to all of this is the upcoming presidential election, which could have major implications for the direction of the DOJ. It makes the timing of the DOJ’s amicus brief in support of Judge Garnett’s ruling all the more interesting.
Whatever happens will have a ripple effect across the sports media landscape and ultimately impact the way we as fans can watch and access games. If allowed to launch, Venu could prove to be a huge disruptor in the space. If not, media companies will be forced back to the drawing board to figure out how best to distribute sports to the masses.
[Puck]
