Venu Argues Injunction Only Protects Fubo, Not Consumers
Calling their service pro-competitive, Disney, Fox and Warner Bros. Discovery gave their arguments as to why an injunction against Venu Sports should be lifted.
Disney, Fox, and Warner Bros. Discovery aren’t giving up on their fervent hopes of launching Venu Sports in time for the College Football Playoffs and Super Bowl. The three companies were back in court last Friday, filing a motion in support of their appeal against a preliminary injunction issued in Fubo’s antitrust lawsuit against the service. The filing represents the best insight into the arguments they’ll use to defend their joint venture yet.
Key Details:
- The defendants say the court’s finding of antitrust violations because they had not allowed Fubo to sell “skinny” bundles was erroneous.
- Even if Venu saps customers from Fubo, that doesn’t mean antitrust laws have been violated, the programmers argue.
- Caught in a “perfect storm” of rising content and distribution costs, Disney, Fox, and WBD are just trying to go their own way, the brief says.
Disney, Fox, and WBD are once again hoping that their argument that Venu is pro-competition will help its standing in court, despite the fact that it did not sway U.S. District Court Judge Margaret Garnett when she blocked it from reaching customers via injunction in August.
In their motion appealing the injunction, they say Judge Garnett erred in her decision, a ruling which “denies consumers a new, lower-cost, innovative product—so as to protect Fubo from increased competition. That is the opposite of what the antitrust laws seek to achieve.”
The three companies cited cases that they say provide precedent for their pro-competition argument. They state that by creating Venu, they are now competitors in the same market as Fubo, instead of simply upstream content providers. That means that they are under no obligation to offer Fubo, or any other multi-channel video programming distributors (MVPDs), products that might be good for those rivals’ businesses.
“That is true even if defendants’ unilateral dealings at the wholesale level of the market—here, in licensing to MVPDs like Fubo—make it harder for those MVPDs to compete with Venu at the retail level—here, in selling video services to consumers,” the brief says.
Venu’s owners also addressed the argument that they’ve never allowed Fubo or other competitors to sell a Venu-like product of their own. They say Judge Garnett never defined what type of channel bundles would constitute the products that Fubo is upset it never got the chance to sell for itself, and point to one of Fubo’s biggest rivals as an example of smaller channel bundles that already exist in the marketplace.
The district court “never defined what products would qualify for its ‘skinny sports bundle segment,’ the programmers argue. “Nor did the district court explain why certain products available to consumers today—such as various SlingTV sports packages—would be excluded from its skinny sports bundle segment. Despite those failings, the district court rested its injunction on the conclusion that Venu would ‘monopolize’ this market segment. But without defining a relevant antitrust market, a court cannot reach any conclusion about whether or not Venu would monopolize anything, or properly assess whether a defendant’s conduct would pose any harm to competition.”
Fubo
Fubo is a live TV streaming service with about 90 top channels that start at $79.99 per month. This plan includes local channels, 19 of the top 35 cable channels, and regional sports networks (RSNs). In total, you should expect to pay about $94.99 per month, after adding in their RSN Fee. Fubo was previously known as “fuboTV.”
Shifting Strategies
While many of the arguments Disney, Fox, and Warner Bros. Discovery made in their filing have been telegraphed throughout the process, they did make one big change in the way they advocated for Venu. Formerly, the three relied on arguments that Venu was never intended to pull customers away from existing pay-TV distributors like Fubo. Instead, it was meant to target cord-cutters and cord-nevers, viewers who had already left their pay-TV plan or never signed up for one in the first place.
The defendants have not completely surrendered that claim, saying in the brief that Venu would be complementary to the traditional channel bundle. But they also said that even if they do swipe some customers from Fubo and other providers, it’s not necessarily a violation of antitrust laws.
“Each Defendant makes its own independent licensing decisions upstream, in a wholesale market for programming licensing,” they argued. “Each remains free to license MVPDs on whatever terms each deems appropriate. Venu does not change or restrict anything about those licensing practices. Thus, even if Venu would ‘squeeze’ Fubo’s profits—by charging consumers lower prices than Fubo can, given its existing licenses—that would not be anticompetitive.”
The impetus is now on Fubo to respond to the motion, and the streamer can’t afford to drag its feet. Both sides agreed to an expedited appeals process in the 2nd Circuit Court; Disney, Fox, and WBD still entertain dreams of getting Fubo to customers by January, in time for the NFL postseason and College Football Playoffs.
Venu Sports
Venu Sports is the planned live TV streaming service offering sports from ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS, and truTV. Programming from ESPN+ and on-demand content will also be available. Users will be able to watch NFL, NBA, MLB, and NCAA games. Subscribers can bundle the product with Disney+, Hulu, or Max. Venu’s launch is on hold thanks to a preliminary injunction.