💀 Death to the Skinny Sports Bundle?

After months and months of crying from all different types of media companies, we finally have some sort of a ruling.

Don’t you just love the feeling after pressing send and publishing an article to have then, 30 minutes later, a BREAKING NEWS alert 🚨 come crushing through the notifications on your phone that alters the entire story you just wrote about? Ok we get it, not everyone here understands that firsthand but show some empathy why don’t ya?! 

On Friday, we published an article on the facts and ramifications behind the budding rivalry between FuboTV and Venu Sports (a sports-centric streaming service which includes the likes of Disney, Warner Bros. Discovery, and Fox). And of course right after we published the article, a ruling was in fact made. Thank you, U.S. District Court Judge Margaret Garnett, we very much appreciate your timeliness. Now let’s review everything that has gone on during this case and this updated ruling could be the end of Venu Sports as we know it (even though we didn’t really know it).

Let’s get after it…

What is Venu Sports?

• As we mentioned above, new sports-only direct-to-consumer streaming service, Venu Sports, was looking to launch this fall through the joint venture of Disney, Warner Bros. Discovery, and Fox.

• Subscribers were set to have access to linear sports networks like:

  • ESPN, ESPN2, ESPNU, SEC Network, ACC Network, ESPNEWS, ABC, FOX, FS1, FS2, Big Ten Network, TNT, TBS, and truTV.

  • They will also have access to ESPN+, Hulu, and Max.

• Just a couple weeks ago, Venu Sports announced their offering would cost $42.99/month — not too terrible considering you could have just about all the sports imaginable in 1 app.

• The catch is that subscribers won’t be able to completely corner the sports market as CBS and NBC (and their streaming services, Paramount+ and Peacock), will not be apart of this bundle (we get it, it’s sad you won’t be able to watch Sunday Night Football or the PGA Championship).

So what’s their problem with FuboTV?

• Essentially Fubo’s life was on the line and they filed a lawsuit against Disney, Fox, and WBD in federal court for antitrust violations over Venu Sports.

• Fubo argued that Venu Sports is anti-competitive and cannibalizes the market because the three media behemoths are licensing solely their sports channels to Venu Sports — which they don’t offer to other pay-TV distributors, like FuboTV.

  • Fubo even claimed they would run out of cash by Q1 of 2025

• And part of that has got to be frustrating if you’re Fubo, because of carriage agreements pay-TV distributors can’t launch their own sports-specific streaming bundles (because these companies require distributors to bundle their channels with other non-sports channels, too).

• Part of the claim from Fubo is that Venu Sports would combine 60% to 80% of U.S. live sports streaming rights into one product.

  • They even presented data in court, from ESPN, which shows most of the projected Venu customers are current subscribers to pay-TV distributors (like Fubo).

  • Which means Fubo could lose up to 400K customers to Venu by the end of 2024 which would eventually resukt in fewer consumer options and higher prices due to the elimination of long-term competition.

What was the ruling and where does this go?

• Last Friday, it was announced by Judge Garnett that she granted FuboTV’s injunction, ultimately blocking the planned Aug. 23 launch of Venu Sports (perfect timing before College Football and NFL season kickoff!).

• What does it mean? Welll… it means Garnett agreed with Fubo’s main claim that it was anti-competitive that Disney, Fox, and WBD were happy to license a selection of just their sports channels to their own app when they do not do that for other pay-TV apps.

• And what a ruling for Fubo it was!

  • After rising 17% on Friday, and another 18% on Monday, shares in the streaming company increased an additional 8% on Tuesday to reach $1.94 per share. The stock is now trading at its highest levels since the end of February…even though the stock is still down ~42% for the year (don’t tell the Execs that news!).

• Moving forward, the big question is going to be, how much does Disney, WBD, and Fox fight this ruling…because in the grand scheme of things, this ends up being a tiny little blip on their overall P&Ls.

  • However, these media giants won’t go down without a fight as they filed their notice of appeal late Monday against FuboTV, and they’re now taking the antitrust case to the U.S. Court of Appeals for the 2nd Circuit.

  • Taking this to the U.S. Court of Appeals isn’t just because these media execs are stubborn (well maybe partly)…but also because they understand there’s a much larger media strategy to embrace streaming and navigate broader media industry disruption.

  • One example of that comes from Fox CEO Lachlan Murdoch has already predicted that the new streaming service will get 5M subscribers in the next five years.

Now it’s up to the U.S Court of Appeals…as Disney, Fox, and WBD will continue to argue Venu is actually pro-competitive by introducing another player into the pay-TV market, and ultimately it wouldn’t make sense for Venu to cannibalize pay-TV distributors because the three companies would earn more from distributor subscribers than from Venu subs.

If things don’t turn…this might be the end of the skinny sports bundle, that never really got started.

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Quick Hitters

• 🎮 I don’t think we can contain our excitement. It’s just too much! Backyard Baseball is back folks!The parent company of the computer game said today that it’s relaunching after a nearly decade-long hiatus. Playground Productions launched Backyard Baseball in 1997, starring a Pablo Sanchez. The game recreated some of sports’ biggest stars as animated kid cartoon figures playing sports in a backyard, Sandlot-esque setting. The company said the games “will return bigger and better than ever while staying true to what made the franchise so special” and will be released “in the coming months,” according to the release. The company also plans to expand the franchise into TV, film, merchandise, and more.