Fubo’s lawsuit against the three media companies behind the stalled sports streaming app Venu Sports is quickly becoming a political football. Counsel for five Republican Congressmen filed notifying a federal appeals court they were representing the politicians on a friend of the court brief in the case. And attorneys general for six Republican led states filed their own friend of the court brief on behalf of the three media companies, the Walt Disney Co., Fox Corp. and Warner Bros. Discovery.
Earlier this year, Democratic senators Elizabeth Warren and Bernie Sanders as well as Democratic Rep. Joaquin Castro urged the Department of Justice to investigate the Venu Sports launch on antitrust grounds.
Florida, along with the states of Iowa, Kentucky, Alabama, Mississippi and South Carolina, filed the friend of the court brief last night on behalf of Venu. Meanwhile counsel representing Rep. Jim Jordan, Sen. Lindsey Graham, Rep. Darrell Issa, Rep. Scott Fitzgerald, Rep. Kevin Kiley filed notice this morning with the court to also do so.
The states claim they have standing to file because they view last month’s court-ordered preliminary injunction barring Venu from launching as a bastardization of the antitrust laws, which they enforce.
Last month, a New York federal district court judge granted the preliminary injunction to prevent Venu from launching, without which Fubo claimed it would have to shut down. The three companies behind Venu appealed that decision to the 2nd Circuit Court of Appeals, and that’s where the six states filed their friend of the court brief, in legal terms an amici curiae filing. The five Republican Congressmen had not yet filed their brief.
The states’ main contention is that the antitrust laws are there to protect consumers, not competitors like Fubo, which rails against Venu as an existential threat. In the states’ opinion, antitrust lawsuits have been used before to stifle competitors, and that is the case here.
“Unfortunately, the district court appears to have fallen for this all-too-common gambit, temporarily preventing the joint venture from providing consumers a new product at half of Fubo’s price,” the brief declares. “In doing so, especially based on a preliminary and incomplete record, the court `turn[ed] the [antitrust] laws on their head’ by allowing Fubo to use them as a tool for protectionism.”
The states later in their brief turn to the alleged price advantage consumers would have from Venu, writing, “Upon launching, the joint venture will charge $42.99 per month, whereas Fubo currently charges over $80… So even if the joint venture were to raise its subscription fee (an annually planned) $5 per year, it is not clear how that would be worse for consumers than the status quo.”
Of course, this is a bit of apples and oranges and gets to the heart of Fubo’s case, which the states don’t quite address. Venu is cheaper because it doesn’t carry general news and entertainment channels (some of the 14 channels planned for Venu, like Fox and TNT are not pure sports outlets so have other content).
And the reason Fubo and other pay TV distributors do not offer sports only packages is the upstream pay TV companies like the three Venu partners allegedly don’t allow it. The states laud Venu because “Consumers `will—for the first time—be able to subscribe to a vast array of the sports content [they] want[], without paying for entertainment content’ that they don’t want.” But unaddressed is why that product, a so-called sports skinny bundle, has not been offered before.
Also, the price advantage Venu has over Fubo needs to be viewed in context. Venu, if it is allowed to proceed, does not include CBS Sports or NBC Sports, niche channels like Tennis Channel, or sports on streamers like Amazon Prime and Netflix. While Fubo does not have the streamers’ content it does the others, so a consumer buying Venu wanting to replicate Fubo’s sports offerings would have to pay for platforms such as Peacock and Paramount+. It still would be less than Fubo, just not half the cost touted by the states.
The states briefly address the issue of channel bundling, the practice Fubo and other distributors allege has harmed them. The terms of the bundling imposed by the three pay TV operators–requiring distributors to buy entertainment and news channels if they want sports channels–was not enforced on Venu.
So while the states are correct in noting the district court judge wrote bundling is not on trial here, it is part of the overall argument Fubo makes: that the three pay TV companies should not have the right to establish a new competitor in the distribution market that plays by different rules. The six states obviously disagree.
[W]hether bundling—which is part of the market status quo—is bad for consumers is irrelevant,” the states wrote. “Even assuming that bundling is an anticompetitive practice that has created a market `opportunity,’ a new firm can take advantage of that opportunity without raising antitrust concerns.”
Florida appears to be the state leading the group of six. It is listed as counsel for the Amici States. Florida’s top legal officials are listed with contacts, whereas the other five states just have their attorney generals named. An email sent to Florida’s solicitor general asking what precipitated the amicus brief was not replied to.
The three companies announced Venu in early February, and Fubo filed the lawsuit several weeks later. The district court held a four-and-a-half day quasi-trial last month on the preliminary injunction, featuring 19 witnesses. The judge’s decision came just days before Venu planned to launch.
In the three media concerns’ appeal brief earlier this month, they ask the court to overturn the lower court’s ruling. But they add if the higher court does not do so, to require Fubo to provide a security bond to cover damages if Venu ultimately succeeds. Currently, the trial is scheduled for October 2025.
