Fubo stock gains again after judge blocks Disney-Fox-WBD sports streaming bundle due to 'near-monopolistic' concerns

By Weston Blasi

Rival streamer FuboTV's stock gained 4.1% on Wednesday and is up 56% over the last five days.

Shares of sports-streamer FuboTV Inc. (FUBO) moved 4.1% higher on Wednesday after Venu Sports, a streaming service from Disney (DIS), Warner Bros. Discovery (WBD) and Fox (FOXA) (FOX), was blocked by a judge from launching just a week before it was set to debut.

FuboTV's stock is now up 56% over the last five days.

The three companies are attempting to "exercise near-monopolistic control over the ability for a different live-sports-only streaming service to exist and compete," U.S. District Court Judge Margaret Garnett ruled last week.

The judge sided with rival FuboTV and issued a preliminary injunction that blocks Venu Sports from launching. The service plans to group sports content from Disney, Fox and Warner Bros. into a bundle priced at $42.99 a month.

FuboTV argued that that the joint venture could reduce competition in the industry for sports streaming.

See: Stop buying FuboTV's stock. It's too early in the legal process to bet on a win.

The ruling was a "victory not only for Fubo but also for consumers," FuboTV said in a statement to MarketWatch. "This decision will help ensure that consumers have access to a more competitive marketplace with multiple sports streaming options."

"We respectfully disagree with the court's ruling and are appealing it. We believe that Fubo's arguments are wrong on the facts and the law, and that Fubo has failed to prove it is legally entitled to a preliminary injunction. Venu Sports is a pro-competitive option that aims to enhance consumer choice by reaching a segment of viewers who currently are not served by existing subscription options," a spokesperson speaking on behalf of ESPN, Warner and Fox, told MarketWatch.

Due to the high cost of acquiring the rights to live sports, the $42.99 monthly price point is higher than for other streaming services that stop short of acting as a replacement for cable TV.

But if Venu Sports eventually does get regulatory approval, will people be willing to pay for it?

"Any bundle with the objective of making it easier for viewers to find their preferred content without wondering where to find it, or having to own multiple apps to access it, is something to really root for," Jacqueline Corbelli, CEO of the the advertising-software company BrightLine, told MarketWatch. "Unfortunately, it isn't likely that Venu can be an answer for the true sports enthusiast in this regard."

Venu's programming will consist of the entire sports portfolios of Disney, Warner Bros. and Fox, including games from the NFL ("Monday Night Football" and some Sunday games), NBA (regular-season games and the NBA Finals), WNBA, NHL, college football (regular-season games and the College Football Playoff), college basketball and tennis (all four Grand Slam events).

Venu would also offer subscribers the ability to watch pre- and postgame coverage and shows like "Inside the NBA."

The three companies each have one-third ownership, according to the joint-venture structure.

This sports bundle isn't simply a repackaging of the existing brands' streaming services. It also includes offerings not available elsewhere.

The ESPN channel, which broadcasts hundreds of sporting events and shows each year, is not available in a standalone direct-to-consumer service outside of traditional pay TV. The same goes for the Fox channel, which is where many college football and NFL games are shown.

Venu is targeting sports fans who are outside the pay-TV ecosystem.

People who don't subscribe to cable or a service like YouTubeTV (GOOG) (GOOGL) may find Venu's offerings robust, but the three media behemoths behind the service don't hold the rights to all sporting events.

Amazon (AMZN), NBC (CMCSA), CBS (PARA), Apple (AAPL) and Netflix (NFLX) have sports rights of their own, for which Venu users will have to pay separately. That includes Amazon's NFL package, NBC's Olympics and Premier League programming, CBS's March Madness and golf programming, Apple's soccer schedule and Netflix's Christmas Day NFL games, to name a few.

And NFL fans will find that Venu, presuming it is launched, won't have all the games this season. In 2024, NFL games will appear on ESPN, ESPN+, ABC, Amazon, CBS, NBC, Fox, Peacock, Netflix and the NFL Network, only some of which are available through Venu.

"The proposition to bundle the streaming experience for sports fans is grail-like, but to succeed, it will need to actually be a one-stop shop - and this is neither possible now nor likely to be possible at all, given the literal bidding war major streamers are showing they are more than willing to engage in," Corbelli said.

The $42.99 subscription price "feels very high given the unclear value and will potentially annoy consumers with an already growing frustration with the rising costs of streaming," she added.

Read: No. 1 NFL pick Caleb Williams asked for his $40 million contract to go into an LLC. Can he do that?

What's more, that price may not be here to stay.

"This is a specialty product with a very defined marketplace," Bob Mitchell, founder of Mitchell Partnership Alliances and an adjunct professor at the Kogod School of Business at American University, told MarketWatch. "Worth is really about delivering unique value. Keep in mind - no original Venu programming."

After signing on for an initial year, he said, subscribers should prepare themselves for "a significant price increase."

See: Tubi CEO: There's a difference between paying to watch ads and being free with ads

Venu CEO Pete Distad said in a statement on Aug. 1 that he wants the service to "appeal to the cord-cutter and cord-never fans currently not served by existing pay TV packages."

The Venu launch saga comes as one of the joint venture's members is locked in a legal dispute with a prominent sports league.

Warner Bros.' TNT has filed a lawsuit against the NBA after the league awarded part of its TV rights package starting in 2025 to Amazon. Warner Bros. contends that it exercised its contractual matching right in response to Amazon's offer, something the NBA disputes.

Fox Corp. and News Corp (NWSA) (NWS), the parent of MarketWatch publisher Dow Jones, share common ownership.

See also: LeBron James and his USA basketball teammates have made $4.7 billion. Here's how much most U.S. Olympians make.

-Weston Blasi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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08-21-24 1628ET

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