Original Article: Bloomberg, by Hannah Miller and Molly Schuetz, January 10th, 2025

Walt Disney Co., Fox Corp., and Warner Bros. Discovery Inc. scrapped plans to create a joint sports streaming service, saying they want to focus on their existing online offerings instead.

The decision came just days after Disney agreed to merge its Hulu + Live TV streaming service with the online sports-focused company FuboTV Inc., and to take a 70% stake in the new entity. The deal also settled a lawsuit brought by Fubo against the three companies involved in creating Venu Sports.

“After careful consideration, we have collectively agreed to discontinue the Venu Sports joint venture and not launch the streaming service,” the companies said in a statement Friday. “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.”

The idea for Venu Sports was hatched last year as the three media companies decided to pool their most valuable sports content — including ESPN, TNT, ABC, and Fox Sports — into a streaming package. Priced at $42.99 a month, the product was designed to reach fans who wanted access to live sports content without a pricier cable plan that can be almost double that amount. Venu Sports targeted a launch date later this year.

The plan was immediately opposed by Fubo, which sued the group on the grounds that it would block competitors and raise prices for consumers. The Justice Department also planned to scrutinize the project.

In August, Federal Judge Margaret Garnett ruled that the suit was likely to be upheld and issued an injunction temporarily barring the launch of Venu. A hearing was set for January 6, the same day Disney and Fubo announced their deal and the agreement to settle the lawsuit. Other competitors cried foul at news of the settlement, saying it didn’t resolve the anticompetitive aspects of Venu Sports.

EchoStar Corp. and pay-TV provider DirecTV Inc. immediately appealed to Garnett, arguing that Disney’s settlement with Fubo amounted to a “payoff” and restored “an anticompetitive runway for the JV defendants to control the future of the live pay-TV market.”

The ongoing legal pressure may have contributed to the sudden decision to scrap Venu, but the product was also flawed, said John Kosner, a sports media consultant and former executive with the NBA and ESPN. Venu would have had much of the available sports content, but only half of all the National Football League games and possibly slightly less than half of National Basketball Association games — since Warner Bros. lost out on NBA rights — as well as limited college sports.

“If you came to market with that product, you were just missing too many things that sports fans want,” he said.

Shares of Fubo fell 4.5% in New York Friday as the major market averages all tumbled. Disney lost 1%, while Fox declined 1.6%, and Warner Bros. slid 3.6%.

Live sports is one of the most valuable areas of TV. As more consumers discontinue their cable subscriptions, the major players are rethinking how to package and price sports content. Disney is planning to launch a direct-to-consumer ESPN flagship product later this year that would offer a full slate of TV programming available on the sports giant’s network as well as additional content on the streaming site ESPN+.

Disney’s deal with Fubo and its focus on its flagship sports streaming service showed that the marketplace had moved beyond Venu, said Lee Berke, president and chief executive officer of consulting firm LHB Sports, Entertainment & Media Inc.

“Venu was increasingly becoming superfluous,” he said.

As part of the deal, Fubo would be able to offer a new “skinny bundle” with Disney’s ESPN and ABC channels, similar to what Venu would have offered. Disney also made deals with DirecTV to offer a portfolio of direct-to-consumer services. Berke said there could be potential for Fox to join forces with the ESPN flagship and have some of its sports content distributed there.

The Fubo deal has also helped Disney corner the market on live sports, according to Jon Klein, CEO of sports and fan engagement platform Hang Media. With a total of 6.2 million subscribers, the enlarged Fubo will be the second-largest online pay-TV distributor, behind YouTube TV.

“It looks from the outside like a power move by Disney to muscle out its former partners in Venu because they don’t need them anymore because they now own Fubo,” he said.

It may be more appealing now for Warner Bros. Discovery, which has lost much of its sports rights, to make some kind of deal with NBC, Klein said. NBC’s parent company, Comcast Corp., is spinning off some of its assets, though it is retaining the NBC network, its Peacock streaming platform, and the Bravo channel.