Fubo, Disney Make Last-Chance Bids to Sway Judge in Venu Sports Case

FuboTV and a group of defendants that include Walt Disney, ESPN, Fox, Warner Brothers Discovery and Hulu filed post-hearing briefs Tuesday, a day after their attorneys delivered closing arguments in a case that could determine the fate of sports-centric streaming platform Venu Sports.

Post-hearing briefs are intended to be concise, direct and persuasive summaries of the strongest arguments raised by a party after a hearing. They are, more bluntly, the last chance for the attorneys to convince the judge before a ruling. 

U.S. District Judge Margaret M. Garnett will weigh the dueling briefs as she considers Fubo’s motion for a preliminary injunction to block the launch of Venu Sports, which is expected to be released by the fall and cost $42.99 a month. An injunction would effectively shelve Venu Sports at least until a trial—which wouldn’t occur until next year or later—absent a successful appeal to the U.S. Court of Appeals for the Second Circuit or an out-of-court settlement. 

As Sportico explained Monday, a preliminary injunction that punts Venu Sports to an uncertain future could cause the defendants to reconsider whether their agreement to release the service still makes business sense. But the defendants have a factor in their favor: Injunctions are considered by courts to be “extraordinary and drastic” remedies. That means Fubo must meet a high threshold to prevail.

Fubo’s brief attempts to narrow the question of review for Garnett in a way that it believes is most favorable. While Fubo’s lawsuit, filed in April, offers several antitrust theories, including in regard to each defendant, the company stresses its motion for an injunction is not about “unilateral conduct by any defendant.” It instead concerns what Fubo terms the defendants’ “collective action.” This collective action, as Fubo tells it, involves Disney, Fox and Warner Brothers “combining their collective 60-80% of U.S. live sports streaming rights” to further an anticompetitive conspiracy that would result in the release of Venu Sports.

Fubo builds on that point to try to debunk the defendants’ reliance on two U.S. Supreme Court decisions from the 2000s (Trinko and LinkLine) as “misplaced.” 

In those cases, the Supreme Court held that companies do not have a duty to deal with rivals or to offer them particular prices or terms. That is relevant here since Fubo complains it has been denied the chance to offer a skinny sports bundle like Venu Sports. The defendants say that’s not a credible legal argument since—based on Supreme Court precedent—they have no duty to offer Fubo such a chance.

Fubo insists the defendants are misconstruing its argument and citing inapplicable precedent. As Fubo tells it, Trinko and LinkLine concerned a single entity “acting unilaterally,” whereas this litigation involves Disney, Fox and Warner Brothers acting collectively. Fubo warns Garnett that this collective action would produce a “must-have” monopoly that could “put Fubo out of business and harm competition and consumers as well.”

Fubo urges Garnett to place more weight on U.S. v. Columbia Pictures, a decision from the Southern District of New York in 1980 that was affirmed by the Second Circuit in 2021. 

Columbia Pictures concerned major movie producers trying to form a joint venture cable TV network, called Premiere, that would have gained exclusive access to the producers’ new movies for a nine-month period after release. Premiere would have made it more difficult for HBO, Showtime and the Movie Channel to operate since they relied so heavily on showing new hit movies. U.S. District Judge Gerard Louis Goettel worried that “Showtime and The Movie Channel could be put out of business” while HBO would be relegated to showing older movies. Consumers could then be left with fewer choices to watch new movies outside of the theater and pay more, too. The Justice Department sought and obtained a preliminary injunction on grounds the studios were unlawfully restraining trade through their concerted action and price fixing. 

Fubo says this case is similar since “like [ESPN and other defendants] here, the movie production companies denied any third-party distributor the opportunity to offer a product competitive with their downstream JV by making that product exclusive.” 

Fubo acknowledges the defendants have countered the applicability of Columbia Pictures since the sports content on Venu Sports would not—in contrast to movies shown on Premiere—be exclusively shown on Venu Sports. Consumers would have other ways of obtaining content that appears on Venu Sports, including through other distribution models and bundles (such as Disney offering ESPN directly to consumers). 

But Fubo downplays such a distinction as “form over substance,” since it says each of the defendants “already prohibits third parties from offering skinny sports bundles” and have negotiated long-term contracts that will further deny third parties. Fubo also contends the relevant lesson from Columbia Pictures doesn’t stem from the exclusivity of movies that would have been shown on Premiere but rather on allegedly harmful effects that would have been felt by “new and struggling” competitor companies.

The defendants’ post-hearing brief tells a completely different story to Garnett. 

The defendants argue Fubo’s case is without merit since they are “entitled to license their networks to anyone on any terms—or no terms at all.” The defendants underscore that each of them has given Venu Sports a “non-exclusive license to a subset of its networks” which they say means Venu Sports “does not lessen competition in any market.” Instead, the service would be “additive” and supply “sports-focused consumers an additional, attractive choice.”

The defendants also depict the relevant marketplace as highly competitive, including as shown by Peacock and Paramount+ featuring “extensive sports content” that “can be self-bundled.” As the defendants see it, Venu Sports will only make it easier for consumers to “create numerous bundles at different price points.” They also point out that each still competes against the other and offers their own content. To that end, the defendants stress “WBD has placed its sports content on Max” and cite testimony from ESPN chairman Jimmy Pitaro to assert “it is undisputed” that ESPN will launch its own streaming service, Flagship, “next year.”

For several reasons, the defendants also contend Fubo’s reliance on Columbia Pictures is distorted and unpersuasive. First, each of the defendants license networks independently, rather than collectively. Second, Venu Sports offers “only non-exclusive content.” And, third, “defendants have no agreement on licensing to other distributors.”

Garnett is expected to make a ruling later this week or next week.