DirecTV, Dish challenge Disney-Fubo merger over Venu Sports launch

The news: DirecTV and Dish (EchoStar) are contesting the dismissal of Fubo's injunction against the launch of Venu Sports, the streaming joint venture from Disney, Fox, and Warner Bros. Discovery.

• Fubo previously secured an injunction blocking Venu's rollout, citing anticompetitive practices, but it dropped the lawsuit following a merger deal with Disney's Hulu + Live TV.
• DirecTV and Dish are now urging US District Judge Margaret Garnett to reinstate the injunction, arguing the merger circumvents antitrust concerns.

Catch up quick: Earlier this week, Disney's Hulu + Live TV and Fubo said they would be merging, with Disney retaining a 70% ownership stake while Fubo management continues to run the venture under the Fubo brand.

The Fubo-Disney venture would create a larger competitor to YouTube TV, reshaping the virtual multichannel video provider (vMVPD) sector.

Why it matters: Sports programming remains a critical driver of subscriber growth in streaming, making control over licensing a powerful tool for companies like Disney.

Competition off the field: DirecTV and Dish argue that the merger allows Disney, Fox, and WBD to bundle sports licensing rights, creating anticompetitive incentives.

• They claim the venture would lead to higher programming fees for distributors like them, effectively foreclosing competition.
• The original lawsuit alleged Disney, Fox, and Warner used their control of critical sports channels to force distributors to carry unpopular, expensive channels, increasing consumer costs.

Our take: The dispute highlights tensions in the media landscape as major players consolidate sports and entertainment licensing rights.

• DirecTV and Dish’s argument centers on the risk of monopolistic practices, particularly bundling and price-setting that disadvantage smaller distributors and raise costs for consumers.
• Reinstating the injunction could delay Venu's launch, compel Disney, Fox, and WBD to address antitrust issues, and set a precedent for tougher scrutiny on sports-related mergers.
• If DirecTV and Dish are unsuccessful, they may need to explore other legal avenues or renegotiate terms to mitigate the competitive disadvantages posed by Venu’s launch.

Ultimately, the central concern revolves around how these consolidations affect consumer costs, as bundling unpopular channels with must-have sports programming could lead to higher subscription prices.

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