Legal Battle Forces Disney, Fox, and WBD to Weigh Venu’s Future Value

The legal battle surrounding Venu Sports, as expected, has escalated, with a formal notice by the streaming property’s three backers to appeal a preliminary injunction blocking the service’s debut. But the bigger question is still how much the bundle truly matters to Disney, Fox, and Warner Bros. Discovery. 

The trio of media giants filed its notice of appeal late Monday against FuboTV, and is now taking the antitrust case to the U.S. Court of Appeals for the 2nd Circuit. 

“We believe that Fubo’s arguments are wrong on the facts and the law, and that Fubo has failed to prove it is legally entitled to a preliminary injunction,” the companies said. “Venu Sports is a pro-competitive option that aims to enhance consumer choice.”

Corporate Priorities

Despite that legal move, industry chatter continues to rise as to whether Venu Sports will actually see the light of day and, if it does, how meaningful it will really be. Long before U.S. District Court Judge Margaret Garnett issued her ruling, Disney CEO Bob Iger made clear that Venu Sports was only one component of a much larger corporate strategy to embrace streaming and navigate broader media industry disruption.

In particular, Iger has frequently discussed plans to introduce a stand-alone, direct-to-consumer version of the flagship ESPN network in the fall of 2025, an effort that is a major initiative for all of Disney.

“That will be a very, very immersive—and obviously sports-centric—app, which will have features that this combination with Fox and Warner Bros. Discovery will not have, such as integrated betting, integrated fantasy … [and] merchandise capabilities,” Iger said in February of the forthcoming DTC version of ESPN.

During recent earnings calls, executives from WBD and Fox offered more overt support for Venu Sports, with WBD CEO David Zaslav calling it something that “will appeal to cord-cutter and cord-never fans not currently served by existing pay-TV packages.” Fox CEO Lachlan Murdoch, meanwhile, reiterated a somewhat modest projection of five million subscribers for the service by 2029.

But both WBD and Fox are smaller than Disney, in terms of revenue, and WBD’s TNT Sports is particularly in the midst of reconstituting its sports portfolio after the NBA did not renew its rights deal with the network. Those factors give Venu Sports a larger profile within those companies. The service will also primarily rely on backend technology from Fox.

The Winning Streak Continues

FuboTV’s stock, meanwhile, continued its strong market rally since Garnett granted the injunction against Venu Sports.

After rising 17% on Friday, and another 17.6% on Monday, shares in the streaming company increased an additional 7.8% on Tuesday to reach $1.94 per share. The stock is now trading at its highest levels since the end of February.