FuboTV secures preliminary injunction to block Venu Sports launch

The GIST: It’s official — Venu Sports won’t begin streaming anytime soon after a federal judge granted a preliminary injunction to squash the megalithic app (which was set to launch on August 23rd) on Friday.

• The app is now shelved indefinitely as Venu’s creators appeal the decision in their months-long legal battle with fellow sports streamer FuboTV.

The app: Venu Sports is a joint brainchild of ESPN’s parent company Disney, Fox, and Warner Bros. Discovery (WBD). The trio — which collectively owns over 60% of broadcast sports content in the U.S. — proposed pooling their content into a single sports-only app.

The lawsuit: On February 22nd — less than three weeks after Venu Sports’ announcement — FuboTV filed an antitrust lawsuit, alleging that the app’s existence would shutter its business. Unlike Venu, pay-TV distributors like FuboTV must pay for non-sports channels to access sports programming — meaning the proposed app wasn’t playing by the same rules as every other sports streamer.

• Launched in 2015, FuboTV initially focused on soccer-specific content but has since added NFL, NBA, MLB, and NHL rights. The company now claims that Venu would render FuboTV unable to compete in the space.

• In a July motion, Venu’s owners hit back, calling FuboTV “a weak competitor” that “adds little value to the TV ecosystem” other than acting “as a middleman aggregator of content that other companies make possible.” Ouch.

The problem: As the Wild West of streaming begins to resemble an ironically cable-like format due to streaming mergers and acquisitions, consumers are shelling out for multiple subscriptions each month. To some extent, a joint app like Venu could help eliminate that problem.

• This setup is ideal for consumers and the giant companies behind the consolidation — but not for their competition. An app like Venu creates a real David vs. Goliath situation, which is what FuboTV has argued.

• The judge agreed with FuboTV’s claim that Venu is playing by different licensing rules, making it impossible for smaller companies to compete, thereby creating a monopoly.

What’s next: Venu’s owners are appealing the injunction, but the project could fall apart if one of the companies abandons the venture. While there’s no certainty this will happen, Disney — the trio’s top sports media rights heavy-hitter — did say it would “weigh its options.”

• For FuboTV, this is part of a larger battle against the biggest sports broadcasters, which the streamer claims monopolize the market and stifle competition. They took this round, proving the Mouse doesn’t always win.