A Fumbled Re-Bundle – How Legal Challenges Forced Disney, Fox, and Warner Bros. Discovery to Drop the Ball on Their Proposed Joint Streaming Service, Venu Sports

Last month, Disney, Fox, and Warner Bros. Discovery (WBD) collectively announced that Venu Sports, their live sports streaming joint-venture, would not proceed, less than a year after the planned platform was originally announced. Venu, while highly anticipated, was also embattled in litigation. Live streaming platform FuboTV sued the three media giants in February 2024 alleging that the joint venture violates federal antitrust law, and in August, the federal judge issued an injunction delaying Venu’s launch. The announcement to shutter Venu came as a surprise to many experts, as it came just four days after Disney announced that they are acquiring Fubo as part of a $365 million settlement to the suit, which many saw as a signal that the three companies were moving forward with Venu. Yet the settlement did not end Venu’s legal challenges: DirecTV challenged the suit’s dismissal on January 9, the day after the settlement, claiming it “restores ‘an anticompetitive runway for the [joint venture] Defendants to control the future of the live pay TV market.’”

Live sports has been an area in which existing streaming options have yet to disrupt legacy cable television options to the extent they have in other genres of television and film. The industry is heavily fragmented with many sports leagues, each having broadcasting agreements with multiple networks.  Historically, Disney (ABC/ESPN), Fox, WBD (TBS/TNT), CBS, NBC, and regional sports networks (RSNs) have all been broadcasting partners with the various major leagues. While many of these broadcasters have their own streaming platforms, such as Disney’s ESPN+, NBC’s Peacock, and CBS’s Paramount+, broadcasting agreements written prior to streaming’s proliferation precluded networks from distributing their games outside of their linear television channels. As these broadcasting agreements are being renewed, streaming has become a central role of media distribution, and networks are gaining flexibility in how they can distribute their content. For example, CBS simulcasted all of their in-market NFL games on Paramount+ in 2024. These new streaming-centric deals have also brought tech companies into the fold; Amazon (NFL/Thursday Night Football beginning in 2017), Apple (MLS beginning in 2023), and Netflix (NFL/Christmas Day beginning in 2024) have also acquired broadcasting rights recently. The NFL on its own has broadcast partnerships with CBS, Fox, NBC, ABC/ESPN, Amazon, and Netflix. However, with so many platforms hosting broadcasts, consumers have grown frustrated with the fragmentation and see a loss in the convenience and savings that streamers drew consumers away from cable with in the first place. 

This situation shows how the media companies are struggling with the realization that the current fragmented streaming market is unsustainable, yet each wants to ensure that they are not left behind as the streaming services “re-bundle.”

Venu, planned to launch this fall, would have given cord-cutters access to live sports that the three parent companies had broadcast rights for. Collectively, the three holds the majority of national broadcasting rights to MLB, NBA, NHL, college football and basketball, World Cup soccer, tennis, and some NFL and golf. At $42.99 per month, it would have been around half the average cost of cable. However, it would not have completely solved the fragmentation issue, as games that NBC, CBS, RSNs, and the various tech companies, such as local MLB and NBA broadcasts, NFL games, MLS, the Olympics, and Masters Sunday would not have been part of the platform.  

Fubo, which operates a live tv network-bundled cable alternative, similar to YouTube TV, argued that the Defendant-networks “impose ‘bundling’ requirements” of lesser-valued channels that the defendants own, containing content which Fubo’s customers “do not want or need,” in order to carry the more-watched sports networks. This, they argue leads to “above-market licensing fees . . . freezing price competition and place[s] any nascent competitor or potential new entrant at a significant competitive disadvantage relative to the vertically integrated giants.” Venu, on the other hand, would unbundle live sports—the most significant draw to live television—from the rest of the traditional cable package, and be sold directly to consumers at a discount in which platforms like Fubo are unable to offer. 

As part of the settlement, Fubo is combining with Disney’s Hulu + Live TV in an attempt to better compete with YouTube TV, the market leader in bundled live streaming television. While Disney is not proceeding with its competitors in the joint venture, it has been in the process of creating its own platform, dubbed “ESPN Flagship,” seeking to have rights to it’s linear network offerings that ESPN+ currently does not have. 

This situation shows how the media companies are struggling with the realization that the current fragmented streaming market is unsustainable, yet each wants to ensure that they are not left behind as the streaming services “re-bundle.” It’s not clear whether Venu would have been the consumer-friendly solution—the $42.99 price point is high for providing some, but not all, live sports. Depending on which league(s) a subscriber follows, they likely would still have to subscribe to other platforms in order to watch all of their teams’ games. As a result, contemporary sports fans are faced with a novel dilemma as they chose how they want to engage in live sports viewership.

Matthew Heldman

Matthew Heldman is a second-year law student at UNC School of Law. Prior to law school, Matthew worked in housing and economic development for hometown, the City of Cincinnati, and studied urban planning at Emory University.