EchoStar and DirecTV argue that a settlement between Fubo and the Venu sports streaming JV doesn't fix the underlying antitrust issues originally raised by Fubo. They have urged a judge to resist vacating prior decisions in the case.
Legal bigwigs with EchoStar and DirecTV have sent nastygrams to a district court judge arguing that a new deal between Disney and Fubo that includes a dispute settlement does not fix the underlying antitrust violations that were tied to Fubo's original complaint targeting the proposed Venu Sports joint venture (JV).
Those letters surfaced in the days after Disney announced it had agreed to merge Hulu + Live TV business with Fubo, a sports-oriented virtual multiannual video programming distributor (vMVPD) that had issues with Venu Sports, a sports streaming JV of Disney, Fox and Warner Bros. Discovery (WBD). That agreement also settled all litigation between Fubo, Disney, Fox and WBD, which included a cash payment to Fubo of $220 million, with Disney committing another $145 million in the form of a term loan.
Fubo had sued the Venu JV partners on antitrust grounds, arguing that Venu would destroy Fubo's business. Fubo's lawsuit had garnered support from execs at EchoStar/Dish and DirecTV, which has similar issues with the proposed Venu service. Margaret Garnett, a judge with the southern district of New York, later granted Fubo's motion for a preliminary injunction against Venu, holding that the sports streaming service could drive out competitors.
In their letters, DirecTV and EchoStar told Judge Garnett that the settlement doesn't fix the broader antitrust issue that Fubo originally raised against the Venu JV, and has asked the court to reject a move to vacate any prior rulings or findings in the case.
Settlement 'does nothing' to resolve underlying antitrust violations
"Defendants have paid Plaintiff to ensure cooperation from an aggrieved competitor, but the settlement does nothing to resolve the underlying antitrust violations at issue," Michael Hartman, general counsel and chief external affairs officer at DirecTV, argued in a January 9 letter to Judge Garnett. DirecTV had previously raised "grave concerns" about the Venu JV.
The settlement restores an "anticompetitive runway for the JV Defendants to control the future of the live pay TV market" and "clears the path for Venu to launch unencumbered by removing the injunctions the Court imposed to preliminarily prevent the immediate and irreparable harms the JV launch presents," he added. "By this settlement, Defendants pay off and seek to subsume the very competitor that raised these antitrust violations to the Court. However, Defendants cannot purchase their way out of the antitrust violations."
Dish/EchoStar raised similar arguments in a January 7 letter to Judge Garnett, noting that the Venu Sports service is now expected to launch at a future date in the wake of the settlement but still represents a dire, anticompetitive threat to other pay-TV distributors.
"The Court's decisions stand despite the dismissal; they may not, and should not, be vacated or diminished in any manner," Pantelis Michalopoulos, counsel for EchoStar, explained. "[T]he JV Defendants should not be able to pay their way into erasing the Court's carefully reasoned decision."
In addition to asking the court to resist efforts to vacate prior decisions in the case, DirecTV and EchoStar said they are both evaluating their options regarding the Venu JV and its related settlement with Fubo.
Venu service set to move forward
Venu was originally envisioned to offer a lineup of more than a dozen channels (ABC, ESPN, ESPN2, SEC Network, ACC Network, ESPNEWS, Fox, FS1, FS2, Big Ten Network, TNT, TBS and truTV) and ESPN+ starting at $42.99 per month
There's no clear timeframe for Venu's commercial debut, but "launching Venu is the plan," a person familiar with the agreement between Fubo and Disney told Light Reading last week.
If the deal goes through, Disney will own 70% of the resulting combination of Fubo and Hulu + Live TV. The merged company is slated to operate under the Fubo publicly traded name and be led by Fubo's existing management team, including Fubo CEO and co-founder David Gandler.
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