Venu Sports Launch in Peril After Fubo Wins Injunction

In a ruling poised to delay the release of Venu Sports to 2025 or beyond, U.S. District Judge Margaret M. Garnett on Friday granted FuboTV’s motion for a preliminary injunction to bar Walt Disney, ESPN, Fox, Warner Brothers Discovery and Hulu from moving forward with their sports-centric streaming platform.

The defendants can, and almost certainly will, appeal Garnett’s ruling to the U.S. Court of Appeals for the Second Circuit. The ruling also doesn’t end the case at the trial court level. Fubo sued in April and the litigation in the Southern District of New York could remain in court for many months, if not years. Fubo’s stock jumped 20% on the news to trade at $1.57.

Venu Sports was expected to be released by this fall and cost $42.99 per month. It would be a “skinny” bundle of ESPN, Fox Sports, the SEC Network and other premium sports channels plus some mainstream channels like ABC, Fox and TNT that carry sports. While Venu Sports would offer a wide selection, it wouldn’t carry NFL games that air on CBS, NBC, Amazon Prime or Netflix and wouldn’t offer games carried by regional sports networks.

By granting Fubo’s motion, Garnett has dispatched Venu Sports to the penalty box for the foreseeable future. Absent a successful appeal, early resolution to the case or an out-of-court settlement, the injunction will remain in place at least until a trial, which likely won’t occur until 2025 or later. It’s possible the companies behind Venu Sports might view the wait as incompatible with their business goals and nix the platform altogether.

Fubo overcame difficult odds in convincing Garnett to enjoin Venu Sports. Preliminary injunctions are extraordinary and drastic remedies in law and require a showing of, among other things, a substantial likelihood of success on the merits and that it would suffer irreparable harm without an injunction. Hearings for preliminary injunctions also occur early in a litigation, before the opposing sides have been compelled to fully share relevant evidence and testimony.

Fubo built its argument around a depiction of Venu Sports as a trojan horse. Under the guise of offering sports fans something new and ostensibly dynamic, a group of rivals (i.e., Disney, Fox and Warner Brothers) have—the depiction goes—conspired to monopolize their live sports content. They’ve done so to increase each’s profits and to box out potential competitors.

The release of Venu Sports, Fubo further warned Garnett, could put the company out of business and lead to sports fans having fewer choices and paying more for content. Fubo also complained the defendants refuse to empower streamers to offer their own skinny sports bundles. They instead make streamers bundle sports channels with entertainment channels and other bloat that sports fans don’t want.

The defendants tried to persuade Garnett by identifying what they said were flaws in Fubo’s theory. They underscored that content shown on Venu Sports would not be exclusive to the streaming service and that each of Venu Sports’ backers would continue to individually license sports content—and thus continue to compete against each other. Sports fans, for example, can acquire ESPN through several means and next year ESPN will launch its own streaming service, Flagship, as well.

Venu Sports also wouldn’t include sports content from other competitors, such as Peacock, NBCU, CBS, Paramount+, Apple TV+ or RSNs. As the defendants pitched it, Venu Sports would be additive and pro-competitive in that it offers fans a choice they don’t currently have and doesn’t take away existing choices.

As to Fubo’s complaint that it’s been denied the chance to offer a skinny sports bundle, the defendants insisted that was legally irrelevant. They cited U.S. Supreme Court precedent standing for the proposition that there is no duty under antitrust law compelling businesses to negotiate with competitors or to offer them a particular price or service.

In an appeal, the Second Circuit would review Garnett’s decision to grant Fubo a preliminary injunction under the abuse of discretion standard. The judge’s ruling would be sustained so long as it falls within a range of permissible decisions. The defendants would argue Garnett committed an error of law, such as she applied the wrong standard or incorrectly applied the right standard, or fumbled the findings of fact.

(This story has been updated with Fubo’s stock price in the second paragraph.)