Venu Sports Courtroom Battle Ending but Ruling Could Take Days

Attorneys for FuboTV, ESPN, Walt Disney, Warner Brothers Discovery and Hulu will conclude round one of their Venu Sports legal saga Monday by delivering closing arguments before U.S. District Judge Margaret M. Garnett in New York’s Thurgood Marshall Courthouse.

The hearing on Fubo’s motion for a preliminary injunction began last Tuesday. Garnett is unlikely to issue a ruling until later this week or next. Before deciding, Garnett, a former federal prosecutor whom President Joe Biden nominated to the bench last year, is expected to review post-hearing written briefs that will be filed by the attorneys. Those briefs will accentuate each side’s most persuasive arguments and attempt to mitigate deficiencies that surfaced during the proceeding. 

At issue is Fubo’s demand the defendants be blocked from launching Venu Sports, a sports-centric streaming platform. Venu Sports is expected to be released by this fall and cost $42.99 a month. It is considered a “skinny” bundle of premium sports channels, including ESPN, Fox Sports, the SEC Network, as well as more mainstream channels that carry sports (for example, TNT). 

Garnett granting a preliminary injunction would be a devastating blow to Venu Sports. The order would—barring a successful appeal to the U.S. Court of Appeals for the Second Circuit or the parties settling out of court—remain in place until the district court determines the merits of the case, meaning through a trial. A trial might not take place until 2025 or later. 

But preliminary injunctions are difficult to obtain. They are considered extraordinary and drastic forms of relief and intended to be granted only sparingly. The reason: A preliminary injunction can effectively end a case before the court renders a finding on the merits and before jurors consider evidence and testimony. 

To that point, if Venu Sports is blocked by an injunction until 2025 or later, the defendants–which usually compete against each other–might question whether a delayed Venu Sports would be worth the wait. The marketplace for sports broadcasting is dynamic, evolving and fast-moving and channels are always weighing new opportunities and ventures. Introducing Venu Sports to sports fans makes economic sense for these companies in 2024 but would that still prove true in 2025 or 2026? Would this coalition of competitors be willing to hold out or would it collapse under the weight of an injunction? 

Fubo must convince Garnett it has a substantial likelihood of success on the merits and that it would suffer irreparable harm if Garnett denied the motion. 

Fubo portrays Venu Sports as borne through an anticompetitive consolidation of competitors that are behaving like a “cartel,” with a shared interest to exclude Fubo and other streamers from offering nationally broadcast sports content. If Venu Sports is allowed to proceed, Fubo could be driven out of the steaming market and consumers might be left with higher prices and fewer choices. Or so Fubo contends.

Fubo also accuses the defendants of hoarding the possibility of a skinny sports bundle to themselves. Fubo says it and other streamers have been denied the chance to offer consumers their own skinny sports bundles, with the defendants requiring bundled packages padded with entertainment channels that sports fans don’t watch and don’t want to pay for.

Fubo contends the denial of its motion would cause it to suffer irreparable harm, which ordinarily means harm that money damages can’t cure. The company asserts it would irreversibly lose both market share and customer goodwill; Fubo could even be driven out of the industry altogether. 

During the hearing and in their briefs, Disney, ESPN and the other defendants have insisted Fubo’s arguments are duds. As the defendants see it, Fubo is simply worried about losing customers to a superior platform that offers sports fans what they want. That might constitute a rational economic concern but, the defendants argue, not one that reflects a legal injury. 

The defendants say they aren’t acting as a collective in controlling or licensing content. Each will continue to individually license sports content after Venu launches. To illustrate, Disney will continue to directly offer consumers ESPN content. They also point out Venu Sports will be a non-exclusive licensee of content, meaning the content it offers can be licensed to other providers. 

Venu Sports would also face multiple levels of competition, the defendants maintain, including from bigger and more powerful companies. The defendants cite Amazon Prime and Netflix streaming NFL games and Apple TV+ streaming MLB and MLS games as examples. They also refer to the regional sports network market, including YES and MSG teaming up to launch a direct-to-consumer venture, Gotham Advanced Media and Entertainment (GAME).  The defendants further warn of other possible ventures such as, hypothetically, CBS and NBCU joining forces to compete against Venu Sports. 

The defendants also cite U.S. Supreme Court precedent to insist that while Fubo complains it has been excluded from the chance to license a skinny sports package, that doesn’t identify a legal harm. They argue they have no legal duty to negotiate with Fubo or to contractually empower them to market a package they’d prefer to market themselves.

To that point, the defendants underscore the U.S. Supreme Court’s decision in Pacific Bell Telephone Co. v. LinkLine Communications (2009). Internet providers accused AT&T of violating antitrust law by imposing a higher price for use of its phone lines for Internet service. Chief Justice John Roberts rejected this argument on grounds AT&T “has no antitrust duty to deal with its rivals” or offer them a particular price. He added, “businesses are free to choose the parties with whom they will deal, as well as the prices, terms, and conditions of that dealing.” 

Whether that principle convinces Garnett to deny Fubo’s motion remains to be seen.