Venu Sports, the online video sports service planned by ESPN, FOX, and Warner Bros Discovery, will not go ahead. The companies have pulled the plug on the project, which faced legal opposition. Meanwhile Disney has acquired a majority stake in Fubo.
The project was opposed on antitrust grounds. Fubo sued, claiming that the partners involved had extended rights to Venu Sports that were not available to other distributors. It won a court order that had blocked the plan.
It seemed that Disney, which owns ESPN, had addressed the main objection by agreeing to buy a 70% stake in Fubo to incorporate it the Hulu+ Live multichannel television service. Fubo agreed to settle the litigation with Disney, FOX, and WBD.
Satellite television providers DirecTV and EchoStar argued that the settlement did not address the fundamental antitrust issues. As a result, the partners in the Venu proposition decided to drop it altogether.
“After careful consideration, we have collectively agreed to discontinue the Venu Sports joint venture and not launch the streaming service,” the three companies behind the proposed venture said in a joint statement.
“In an ever-changing marketplace, we determined that it was best to meet the evolving demands of sports fans by focusing on existing products and distribution channels.”
They went on to say: “We are proud of the work that has been done on Venu to date and grateful to the Venu staff, whom we will support through this transition period.”
ESPN, FOX, and Warner Bros Discovery announced their plan to form the joint sports service in the United States in February 2024. The intention was for each to have a one third share in the Venu venture, with equal representation on the board, but with an independent management team.
Under the deal with Fubo, Disney will become its majority owner but it will be led by the existing Fubo management team under its co-founder and chief executive David Gandler.
The combination of Fubo and Hulu+ Live TV will have around 6.2 million subscribers in North America. Fubo and Hulu+ Live TV will continue to be available as separate offerings.
Disney will enter into a new carriage agreement with Fubo that will allow it to create a new offering, featuring Disney sports and broadcast networks, including ABC and ESPN, as well as ESPN+.
As part of the transaction, Disney, FOX, and WBD will make a total cash payment to Fubo of $220 million. Disney has also committed to provide a $145 million load to Fubo in 2026.