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Fubo Battles Disney, Fox and Warner Bros. Discovery in High-Stakes Antitrust Hearing

By  |  August 6, 2024

Lawyers clashed on Tuesday in a pivotal hearing concerning the antitrust lawsuit filed by Fubo against Disney, Fox, and Warner Bros. Discovery. The lawsuit, which could significantly impact the pay-TV industry, took center stage at the U.S. District Court in Lower Manhattan, where Fubo sought a preliminary injunction. If granted, the injunction would delay the launch of Venu Sports, a new streaming sports joint venture.

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    Announced in February, Venu Sports prompted immediate legal action from Fubo, which claims that the service would cause “irreparable harm” to its pay-TV business. According to Deadline, Fubo CEO David Gandler is expected to testify later in the day, buoyed by the company’s robust second-quarter earnings report. Venu Sports plans to aggregate feeds from 15 linear networks owned by the defendant companies, offering the package for $43 a month — significantly less than what Fubo and other operators charge. The joint venture members assert that Venu Sports is intended to complement the main TV bundle, which will continue to license its programming. Fox CEO Lachlan Murdoch has projected that Venu Sports could attract around 5 million subscribers within its first five years.

    In his opening argument, Fubo lawyer Mark Hansen emphasized the company’s long-standing desire to provide a “sports-only” bundle at a lower price point. However, he argued that programmers, including those behind Venu, have consistently blocked these efforts. “They’ve said, ‘Sure, you can have some sports, but you have to take a lot of other stuff,’” Hansen stated, highlighting how this bundling strategy forces price increases to cover additional programming costs.

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    Referencing the quarterly earnings news, Hansen asserted that Fubo has a “path to profitability” if it is not undermined by what the company internally calls “the Raptor,” a code name for Venu Sports used in court by both sides. Despite some industry skepticism regarding Fubo’s viability, Hansen contended that the company is not a “weak sister” doomed to fail. He pointed to the substantial hit Fubo’s stock took following the Venu announcement as evidence of the perceived threat it poses.

    Read more: Disney Must Face Consumer Antitrust Suit

    Disney, Fox, and Warner Bros. Discovery countered that their actions are within the bounds of a free market, arguing that ruling in Fubo’s favor would harm consumers by blocking a competitively priced new entrant. According to Deadline, Disney’s attorney, Wes Earnhardt, dismantled Fubo’s claims in his opening statement. “Even if Fubo’s claims were true (and he asserted that they aren’t), ‘The Supreme Court has said that we are allowed to do what they say we are attempting to do,’” Earnhardt remarked.

    “This should not be a referendum on bundling,” Earnhardt continued, underscoring the longstanding prevalence of bundling in the TV business. “If they wanted to complain about bundling, they should have come here 40 years ago.”

    As part of Fubo’s defense, James Trautman, head of the media and entertainment practice at Bortz Media & Sports Group, was presented as an expert witness. Trautman showcased a slide illustrating a price spectrum, with streaming services like Netflix and Disney+ on one end at $10 to $15 per month, and MVPDs and vMVPDs like Comcast and YouTube TV on the other, priced at $70 and above. Positioned in the middle was an “ocean of opportunity” for Venu at $43 per month.

    Source: Deadline