Venu Sports, a planned partnership among ESPN, Fox Sports and TNT Sports parent Warner Bros. Discovery that would have streamed live sports content from the three companies, was axed Friday.
“After careful consideration, we have collectively agreed to discontinue the Venu Sports joint venture and not launch the streaming service. In an ever-changing marketplace, we determined that it was best to meet the evolving demands of sports fans by focusing on existing products and distribution channels,” the companies wrote in a joint statement.
Announced in February, Venu Sports had faced legal challenges. First, it faced a suit from primarily sports-focused streaming service Fubo, which accused the companies of “a yearslong campaign to block Fubo’s innovative sports-first streaming business.”
Those efforts, Fubo said, included charging it more to license the live sports aired by ESPN, Fox Sports and TNT Sports and forcing Fubo to carry non-sports content that its customers didn’t want.
On Monday, Disney, the parent company of ESPN and Hulu, and Fubo announced that Fubo would be merged with Hulu + Live TV and that Disney would own 70% of the new company with a subscriber base of 6.2 million.
“We are thrilled to collaborate with Disney to create a consumer-first streaming company that combines the strengths of the Fubo and Hulu + Live TV brands,” Fubo co-founder David Gandler said in a statement.
Fubo and the Venu Sports partners successfully petitioned the U.S. District Court for the Southern District of New York to dismiss Fubo’s lawsuit Wednesday, according to The Athletic.
Other companies, however, hinted that they might bring their own legal challenges against Venu Sports, including satellite TV providers DirecTV and EchoStar.
“By this settlement, defendants pay off and seek to subsume the very competitor that raised these antitrust violations to the court,” DirecTV wrote to Judge Margaret Garnett in a letter, according to The Athletic.
Judge Garnett, in her initial block of Venu’s planned launch in August, cast aspersions on the practice of bundling.
“These mind-bending costs do not just hurt the wallets of sports-loving consumers by making them pay for non-sports channels they don’t want, but also hurt those customers who only want entertainment channels but pay significantly higher costs because they are made to pay for unwatched sports, the most expensive of all content,” she wrote, according to Awful Announcing.
People familiar with the matter told CNBC that the three Venu Sports partners chose to shut it down rather than risk a legal precedent that could wipe out the practice of bundling, such as packages that offer both Disney+ and Hulu or cable plans that offer Warner Bros. Discovery channels CNN, TNT and HGTV all at once.
• Brad Matthews can be reached at bmatthews@washingtontimes.com.