It’s a good time to be an investor in the sports and entertainment streaming service Fubo, whose share price leapt 17% late Friday before climbing a further 23% this morning.
Fubo’s surge is the result of its Friday antitrust victory (for now) over Venu, the sports app joint venture between ESPN, Fox, and Warner Bros. Discovery. Venu was going to become available later this week at the price of $42.99 a month, but that’s on hold now—a development that could save Fubo from imminent doom.
As people were pointing out at the time of the then-unnamed joint venture’s announcement in February, this “Hulu of sports” was likely to raise antitrust concerns, given that its backers are the three biggest U.S. sports media players.
It took Fubo all of two weeks to take those concerns to court, with the complaint that these titans had blocked it from launching its own sports-only streamer by forcing it to bundle their sports content with other expensive “content that its customers do not want or need.” That’s why Fubo has to charge at least $80 a month for its English-language packages. And now the content providers were themselves doing exactly what Fubo had wanted to do.
In her ruling Friday, District Judge Margaret Garnett said Fubo had a great point and was so likely to win the case that it was worth hitting Venu with a preliminary injunction, blocking its launch. She said ESPN, Fox, and Warner had carved themselves a “multi-year monopolistic runway [with] powerful incentives to thwart competition and hike prices on both consumers and other distributors.” Even getting to launch would cause consumers and Fubo “irreparable harm.”
Fubo said Friday that its lawsuit would press on—the company still wants a ruling that ESPN, Fox, and Warner harmed it and consumers by blocking Fubo’s sports-only service.
Venu’s backers said they will appeal the injunction, claiming Fubo had “failed to prove it is legally entitled” to that legal brick wall. “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,” they argued.
The companies say Venu is aimed at Gen Z consumers who don’t subscribe to cable, rather than cable subscribers who only want sports anyway. They claim the planned service’s relatively low pricing, which would earn them less than they get from pay TV subscribers, demonstrates the “pro-competitive” nature of the venture. Fubo’s argument is that the low pricing would rather accelerate the cord-cutting trend, and also trigger an exodus of its own subscribers—and investors had seemingly agreed, pushing its share price into the doldrums after the Venu announcement.
Fubo had warned that, without an injunction, it would have gone bankrupt by the first quarter of 2025. Meanwhile, Warner’s lawyers had told the judge that a preliminary injunction would “terminate the joint venture.” Let’s see about that.
More news below.
David Meyer
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NEWSWORTHY
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SIGNIFICANT FIGURES
$1.6 billion
—The maximum level of Chips Act funding that the U.S. will give to Texas Instruments for the construction of new factories in Texas and Utah. Reuters reports that TI will also get $6-8 billion in investment tax credits from the Treasury Department.
IN CASE YOU MISSED IT
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Lawmakers accuse Meta of approving online ads for cocaine and ecstasy, by Seamus Webster
Elon Musk’s X is closing Brazil operations amid legal showdown on fake news and hate speech, by Bloomberg
Why Silicon Valley falls prey to ‘charisma distortion,’ according to investor and Google X founding member Tom Chi, by Allie Garfinkle
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BEFORE YOU GO
AI textbook pushback. We recently noted South Korea’s plans to roll out “AI-powered digital textbooks” that assess kids’ proficiency and use the results to tailor the content they see. But it seems there’s a big backlash to these plans. As the Financial Times reports, parents are worried about kids getting yet more screen time, and some academics say the government should be looking at AI’s errors and other side effects, rather than racing to deploy it in the educational context. Most South Korean teachers seem to like the idea, though.