A federal judge has halted a joint venture by media giants Walt Disney Co. (NYSE:DIS), Fox Corp. (NASDAQ:FOXA), and Warner Bros. Discovery Inc. (NASDAQ:WBD) to consolidate their sports licensing rights into a new streaming service. The decision came after a lawsuit filed by competitor Fubotv Inc (NYSE:FUBO), alleging antitrust concerns.
What Happened: U.S. District Judge Margaret Garnett ruled against the joint venture, known as Venu, on Friday, according to The Hollywood Reporter. The judge found that Fubo is likely to succeed in its claims that the partnership would “substantially lessen competition and restrain trade.”
The court concluded that the launch of Venu would likely lead to a mass exodus of Fubo’s subscribers, potentially causing the company’s bankruptcy. Venu, with a planned fall launch, is expected to be the only option for consumers wanting to watch multiple live sports channels without additional entertainment channels.
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In February, Fubo filed a lawsuit against major media companies, alleging that they leveraged their control over essential sports content to compel competitors into carrying costly and less popular channels. According to Fubo, this practice drives up consumer prices.
To secure a preliminary injunction, Fubo needed to demonstrate that it would suffer “irreparable harm” without a court order to prevent the platform’s release. On the other hand, Disney, Fox, and Warner defended themselves by asserting that Fubo was attempting to protect itself from competition, particularly from rivals planning to launch a groundbreaking new product, according to The Hollywood Reporter.
Why It Matters: The decision comes at a crucial time for Fubo, which recently reported strong Q2 growth, leading to a surge in its stock price. The company’s Q2 sales grew 25% year-over-year to $390.97 million, surpassing analyst estimates. The news of the lawsuit decision could have a significant impact on Fubo’s future trajectory.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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