Well, that ended quickly. The nearly year-old legal war raging between FuboTV and a trio of media giants behind Venu Sports came to an abrupt conclusion this morning with news that Walt Disney would acquire the brash digital pay TV outlet and combine it with Hulu+ Live TV.
Fubo sued Disney, Warner Bros. Discovery, and Fox Corp. over their planned sports streaming app, Venu Sports; and over their historical practice of selling bundled channel packages instead of allowing distributors like Fubo to pick and choose which ones they wanted.
So what happens to Venu? And is bundling safe from further legal challenges?
A source close to the media companies said the plan is to proceed with Venu, which is opposed by a wide range of entities ranging from politicians, and the U.S. government, to distributors like Fubo. Their argument is that Venu would monopolize the market for so-called skinny sports bundles, a channel package offering focused only on sports (Venu will have 14 channels from Fox, WBD, and ESPN). The three companies agreed to license only their sports channels to Venu, a measure they wouldn’t do with others.
“There will be different…packages and options, from Venu, to sports and broadcast bundles like the planned offerings from DirecTV and Fubo, to the broader…packages available today,” the source said when asked if Venu would survive.
Venu still will have a unique position. As part of the deal with Disney, Fubo can offer an ESPN-only bundle, but that does not include the Fox and WBD offerings. And it’s not clear how the ESPN bundle is any different than the direct-to-consumer ESPN app Disney is planning for later this year.
Patrick Crakes, a sports TV consultant formerly with Fox, said Disney’s purchase of Fubo is just the beginning of a wave of mergers and acquisitions he foresees in the highly competitive media space.
“The roll-up is just getting started though,” he said. “Maybe Fox and Turner merge?”
“As a stand-alone vMVPD, Fubo was always destined to be acquired,” he added, using the acronym for virtual multichannel video programming distributors. “It was structurally incapable of making true positive economics. The Venu lawsuit provided the perfect opportunity to be acquired. Makes sense for everyone involved.”
The end of the Fubo case ends one of the toughest and most recent attacks on the structure of the pay TV business. Fubo had won a preliminary injunction in August from a federal judge blocking Venu, suggesting in her opinion that bundling could violate antitrust law.
“It looked like they (Venu and its backers) were not going to be able to obtain favorable relief in the courts,” said Corey Martin, managing partner and chair of Granderson Des Rochers entertainment finance practice. “So on some level, it didn’t seem as though they really had much of a choice other than to engage with Fubo in this way, because Venu itself was imperiled, but also their practices as it related to bundling seemed like the court cases were not going to be ruled in their favor. And thus, they’re actually going to be saving themselves time and money, as it relates to the launch of Venu, as well as the uncertain future as to how this case was ultimately going to play itself out.”
In this light, the Fubo case was an arrow shot at the heart of the Pay TV world’s decades-long practice of requiring distributors to license less popular channels with more popular ones. So Disney’s $220 million price to consume 70 percent of Fubo is a hedge against adverse court rulings and runaway legal costs with a trial previously scheduled for October 2025.
Underscoring that reality, oral arguments before a panel of the 2nd Circuit Court of Appeals had been planned today, including time granted to the Department of Justice.
“The looming specter of the oral argument certainly was hanging over everyone’s head,” Martin said.
Since filing its lawsuit last February, Fubo has taken on an underdog role, portrayed as fighting the David versus Goliath battle against big media, speaking up for distributors and consumers fed up with bundling requirements of pay TV. But Fubo as a public company wasn’t doing this to be a hero, but to answer to its long-suffering investors and perhaps force a sale to a company like Disney. With the deal announced this morning, David and his slingshot have gone over to the other side.
Fubo’s stock toward the close of trading was up 240 percent.
