Judge Blocks Joint Streaming Service from Disney, Fox and Warner Bros. Discovery

Judge Blocks Joint Streaming Service from Disney, Fox and Warner Bros. Discovery - The New York Times

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Judge Blocks Joint Sports Streaming Service From 3 Media Giants

The planned service from Disney, Fox and Warner Bros. Discovery was slated to cost $42.99 a month and aimed at fans who had abandoned cable TV.

A judge issued a preliminary injunction against Disney, Fox and Warner Bros. Discovery on Friday over a planned sports-focused streaming service from the companies, saying the joint venture would most likely make the market for sports viewership less competitive.

The 69-page ruling from a federal judge in New York’s Southern District effectively halts — at least for the moment — the companies’ ambitious plans for the service, called Venu, which was aimed at sports fans who had abandoned cable television.

The service, which had been expected to become available this fall and cost $42.99 a month, promised to offer marquee games from the National Football League, the National Basketball Association and Major League Baseball.

But the idea raised alarms with rivals, most notably a sports streaming service called Fubo, which sued to block the new service’s formation after it was announced this year. In a statement accompanying its complaint, filed on Feb. 20, Fubo alleged that Disney, Fox and Warner Bros. Discovery had “engaged in a long-running pattern” of trying to stymie its business through anticompetitive tactics.

The complaint led to a hearing this month that focused on whether Fubo should be able to obtain a preliminary injunction against Venu, essentially stopping the sports-media venture from proceeding.

In her ruling, Judge Margaret Garnett said Fubo was likely to prevail in its claim that the new service would “substantially lessen competition and restrain trade.” She added that refusing to grant the injunction could limit the effectiveness of any court order reached after a trial.

In a statement, Fox, Warner Bros. Discovery and Disney’s ESPN division said they “respectfully” disagreed with the court’s ruling and were planning an appeal.

“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,” the statement said. “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.”

David Gandler, Fubo’s chief executive, said in a statement that the judge’s decision was “a victory not only for Fubo but also for consumers.”

By offering fans their sports fix à la carte, Disney, Fox and Warner Bros. Discovery were hoping to create a bridge from the dying-but-still-profitable realm of cable subscriptions to the growing-but-not-yet-lucrative world of streaming.

There were major selling points. In addition to games from the biggest leagues, Venu promised to offer sports fans programming from the National Hockey League, auto racing from NASCAR, college sports, combat sports like the Ultimate Fighting Championship and golf from the PGA Tour. In addition to sports content, subscribers would be able to watch nonsports shows, like “The Simpsons” and “The Bachelor,” that were shown on the companies’ networks, like ABC, Fox and TNT.

Disney, Fox and Warner Bros. Discovery were each poised to own one-third of the company, ensuring that the major founders had skin in the game.

In the months since it was announced, Venu had begun staffing up in earnest, including hiring Pete Distad, an experienced media executive from Apple, to be its chief executive.

Benjamin Mullin reports on the major companies behind news and entertainment. Contact Ben securely on Signal at +1 530-961-3223 or email at benjamin.mullin@nytimes.com. More about Benjamin Mullin

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