Venu Sports, the sports streaming joint venture (JV) between Fox, Disney and Warner Bros. Discovery (WBD), has been shelved, the JV has announced, bringing a surprise end to a year-long sports streaming saga.
The trio of companies unveiled Venu Sports in February 2024, and was immediately hit by an antitrust lawsuit from FuboTV, a rival sport streaming service, throwing Venu’s future into question. The issue appeared to have been resolved last week, when Disney announced plans to acquire 70 percent ownership of Fubo, effectively clearing the runway for Venu’s launch.
But on Friday afternoon, the JV revealed it was discontinuing the project entirely, and Venu Sports would not be launched after all.
“After careful consideration, we have collectively agreed to discontinue the Venu Sports joint venture and not launch the streaming service,” the companies said in a statement. “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. 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.”
Settling scores
However, an underlying reason for the cancellation appears to have been the threat of further litigation from DirecTV, the pay-TV distributor that had backed Fubo’s legal action against the JV. DirecTV challenged the case’s dismissal, accusing the JV of buying Fubo’s collaboration.
“By this settlement, Defendants pay off and seek to subsume the very competitor that raised these antitrust violations to the Court,” DirecTV wrote to US District Judge Margaret Garnett. “However, Defendants cannot purchase their way out of the antitrust violations.”
The agreement included Disney, Fox and WBD giving Fubo a combined cash payment of $220 million, alongside a commitment from Disney to provide Fubo a $145 million loan in 2026.
The deal also sees Disney bundling Fubo’s live TV and sports streaming service with its own Hulu + Live TV bundle, while allowing Fubo to create a sports-focused service featuring Disney’s sports and broadcast networks, including ABC and ESPN, as well as ESPN+. Fubo and Hulu + Live TV have a combined 6.2 million subscribers in North America, according to the duo. The companies also said the agreement would offer consumers more flexibility in terms of the bundles of channels they’re able to buy.
Trimming the fat
The issue of bundling is core to the legal dispute. A key component of Fubo’s case against the JV was that in order to carry their sports channels, distributors such as Fubo and DirecTV were also forced to pay for non-sports channels. The distributors argued that these bundling clauses inflated their carriage fees, and these costs were then passed on to consumers.
Conversely, Venu Sports would have been the first “unbundled” sports streaming service, according to Judge Garnett’s ruling in August that granted a preliminary injunction against the JV. The ruling found that the trio had essentially lifted these bundling clauses for their own streaming offering, providing “an anticompetitive runway for the JV Defendants to control the future of the live pay-TV market.”
The bundling issue reared its head the following month when carriage negotiations between Disney and DirecTV fell through, prompting a blackout of ESPN on the pay-TV service. DirecTV blamed “strict bundling requirements” for the soaring costs of pay-TV packages, forcing “fat bundles” on consumers. Rob Thun, Chief Content Officer at DirecTV, urged the provision of flexible, genre-based packagages that lowered prices for distributors and consumers.
“These antiquated requirements force pay-TV customers to subscribe to many channels they may not watch, which have yielded ‘fat bundles’,” Thun said in a blog post. “At the same time, programmers have reserved flexible genre-based offerings solely for themselves, eroding the price-value proposition for pay-TV customers by shifting the best programming to DTC services while raising programming fees on pay-TV.”
The two-week blackout ended when Disney and DirecTV reached an agreement that allows DirecTV the rights to offer “skinny bundles”, such as sports, entertainment, and family packages. The deal also enables DirecTV to bundle Disney+, Hulu and ESPN+, and to distribute Disney’s upcoming ESPN direct-to-consumer service, which will combine ESPN’s main channel and ESPN+, when it launches this year.
Whether these deals will be enough to keep consumers on pay-TV contracts remains to be seen, but if anything can it is surely live sports.