Court Documents Contradict Venu Sports’ Cord-Never Claim

Since its initial announcement in February — long before the joint venture even had a name — Venu Sports has been a lightning rod in the world streaming and broadcasting. Almost immediately, sports-focused live TV streaming service Fubo filed a class-action lawsuit against the companies behind the JV Disney, Fox, and Warner Bros. Discovery. While there is still a long way to go in that case, Fubo might have scored an early victory that could have a major impact both in court and in terms of public perception.

Key Details:

• Executives behind Venu have long maintained that the streamer would not draw substantial customers from pay-TV providers.
• However, documents from ESPN chairman Jimmy Pitaro indicate that by 2029, two-thirds of Venu’s subscribers would come from pay TV.
• It was also discovered that Venu is currently slated to launch on Aug. 23, unless the judge steps in.

In the early days of the joint venture that eventually came to be known as Venu Sports, executives behind the project discussed how the service was being aimed at attracting customers who were not currently part of the pay-TV ecosystem. The goal was to bring in consumers who had either already unsubscribed from pay-TV services or had never signed up to begin with. Fox CEO Lachlan Murdoch believed that the audience for the service was sports fans who had long left cable, satellite, and live TV streaming subscriptions behind and “cord-nevers,” usually younger consumers who had previously avoided live TV subscriptions. Unsurprisingly, Murdoch was not the only exec championing that perspective.

“You’ve got a lot of people, young people who have not subscribed to the multichannel fat bundle,” Disney CEO Bob Iger said in March. “And you have a lot of people that used to be subscribers that lapsed. We want them in. They want to watch sports.”

However, during the discovery process of Fubo’s lawsuit, a document dating back to January 2024 — the month before the joint venture was announced publicly — was uncovered that indicates that the companies behind Venu saw a much different clientele in the streamer’s future. Rich Greenfield of LightShed Partners told investors last week that as part of Fubo’s effort to secure an injunction preventing Venu from launching until its lawsuit was decided, an internal memo from ESPN chairman Jimmy Pitaro came to light that estimated that in the first five years of Venu, roughly 67% of its projected 5 million customers would be people leaving pay-TV subscriptions in favor of Venu.

Not only does this contradict the previous statements from both Murdoch and Iger, but it also supports Fubo’s central claim that the launch of Venu will be inherently anti-competitive because it is allowing the content owners to offer a sports-focused skinny bundle that it has heretofore prevented pay-TV distributors from offering. Fubo, which currently sits at 1.45 million domestic subscribers, has argued that because it has been hamstrung by being forced to pay for less-viewed entertainment channels to have the right to distribute sports-focused channels, major media companies — including those named in the lawsuit — have been actively preventing Fubo from executing its sports-first streaming strategy.

Fubo — like all pay-TV distributors — is forced to pay for channel bundles that package the most highly desirable networks owned by a media company with the less attractive ones in their portfolios. This leads to higher carriage fees for the distributors, which are then passed on to the consumers. This is especially detrimental to Fubo as the company’s strategy has long focused on sports. However, the contract machinations with media entities have made it virtually impossible for the streamer to deliver a sports-only product thus far, despite the fact that Disney, Fox, and WBD are attempting to do just that with Venu.

The Streamable has reached out to Fubo about the courtroom revelation and the company’s spokesperson declined to comment. We have also contacted representatives from Disney, Fox, and WBD, but as of publication time, have not received a response.

However, DIRECTV, which filed a statement in support of Fubo's lawsuit in April, told The Streamable that the company was pleased with the information uncovered through the legal process.

“We welcome the attention and focus on our long-held position that consumers deserve greater packaging flexibility and choice,” a DIRECTV spokesperson told The Streamable. “DIRECTV has provided declarations from our chief content officer, Rob Thun, underscoring our long-held desire for greater packaging flexibility, particularly at parity with the same prioritization direct to consumer platforms are affording themselves”

Of course, there is the possibility that Disney, Fox, and WBD’s calculations on their joint venture’s audience changed from when Pitaro’s memo was written, or even that they have adjusted their strategy so that it doesn’t dramatically impact their pay-TV partners. However, given the short turnaround from when the memo was drafted and when the executives made their statements, that would seem unlikely.

Ultimately, U.S. District Court judge Margaret Garnett will have to rule on Fubo’s injunction request based on the pre-trial evidence uncovered. Fortunately, a decision will likely come sooner rather than later. While recent reports have indicated that Venu is aiming to launch by the end of August, in closing statements, Fubo ‘s attorneys indicated in Monday’s closing arguments that the joint venture will launch next Friday, Aug. 23. That would give Judge Garnett a week and a half to render her ruling before customers have the opportunity to sign up.