Venu Sports, the ill-fated sports streaming joint venture envisioned by Disney’s ESPN, Fox and Warner Bros. Discovery, is no more. Despite reaching a settlement with virtual MVPD Fubo earlier this week that ended antitrust litigation against the JV and its entities, including a preliminary injunction blocking Venu’s launch, ESPN on Friday announced the partners collectively decided to discontinue the venture effective immediately.
The would-be Venu service combining the partners sports assets, including linear networks like ESPN, FS1 and TNT, was to be priced at $43 per month but never officially debuted as a U.S. judge last August blocked its debut and granted a preliminary injunction in Fubo’s antitrust lawsuit against the JV and its entities. However, hopes for Venu were briefly renewed earlier this week when the JV partners reached a settlement with Fubo, ending litigation and coinciding with a deal that merges the vMVPD’s business with that of Disney’s Hulu + Live TV vMVPD service into an entity 70% owned by Disney.
But it was days later that others in the pay TV industry started to cry foul and raise concerns that Disney and the JV had skirted antitrust violations in part through their $220 million pay out to Fubo.
Those in opposition include satellite pay TV providers DirecTV and Echostar’s Dish Network – which had filed court documents in support of Fubo’s antitrust claims previously and on Thursday sent respective letters to U.S. District Judge for the Southern District of New York Margaret Garnett, who was overseeing the case, voicing concerns and hinting they might take legal action of their own.
In announcing the decision to discontinue Venu, the JV partners released the following joint statement, saying they will instead focus on existing distribution channels:
“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 Venu partners stated. “We are proud of the work that has been done on Venu to date and grateful to the Venu staff, whom we will support through this transition period.”
Part of the antitrust concerns related to the alleged practice of so-called “tying,” whereby programmers force distributors to take and package less-popular channels and networks with more desirable ones, like sports, without the ability to unbundle popular networks from less-watched ones so that pay TV providers could potentially offer skinnier sports-only or other genre-based pay TV lineups. One of Fubo’s gripes was that the JV entities allegedly imposed these tying practices and wouldn’t offer the vMVPD terms that would enable more consumer-friendly, skinnier bundles, but did so amongst themselves via the creation of Venu Sports.
DirecTV and Dish were in a similar position. In its letter to Judge Garnett this week, DirecTV said “The defendants can’t purchase their way out of the antitrust violations,” warning of antitrust harm to distributors if Venu launched.
But with the Disney-Fubo deal, the latter also amended carriage agreements with Disney and Fox, which it said will allow for the creation of skinner, customized pay TV bundles including Sports and Broadcast service that involves Disney’s linear sports networks.
Now DirecTV also appears ready to try and strike more favorable deals with programmers. DirecTV provided the following statement via email after news that Venu would be discontinued.
“DirecTV remains a leader in sports, and we look forward to working with our programming partners – including Disney, Fox and Warner Bros. Discovery – to compete on a level playing field to deliver sports fans more choice, control, and value all-in-one experience, ” the company stated.