U.S. District Judge Margaret M. Garnett, who in August granted FuboTV’s motion for a preliminary injunction to bar Walt Disney, ESPN, Fox, Warner Bros. Discovery and Hulu from moving forward with their sports-centric streaming platform dubbed Venu Sports, denied the defendants’ motions to dismiss the lawsuit on Monday.
The ruling, which followed the parties’ oral argument held before Garnett last Friday, was expected since Garnett previously expressed skepticism toward the defendants’ arguments when she issued the injunction. The parties have been ordered to complete fact discovery by March, and the case is currently scheduled for a three-to-four-week trial in the fall of 2025.
But the trial date is subject to change and the proceedings could be canceled if the parties settle or the U.S. Court of Appeals for the Second Circuit determines that Garnett erred.
To that point, the defendants appealed Garnett’s ruling on the injunction to the Second Circuit, which has yet to name a three-judge panel for the appeal. The defendants will likely appeal Garnett’s denial of a motion to dismiss as well.
The Second Circuit’s review is coming up. On the morning of Jan. 6, 2025, the court will hold an oral argument at the Thurgood Marshall U.S. Courthouse in New York City for the appeal of the preliminary injunction. Each side will be allowed 15 minutes to make their best argument, during which the judges can and likely will interpret with questions. Following the oral argument, the Second Circuit will likely issue a ruling in a matter of weeks or months.
If the Second Circuit sides with the defendants, the court would vacate Garnett’s injunction. That development would make it possible for ESPN and its Venu Sports partners to launch their platform. But if the Second Circuit sides with Fubo, the case will remain as is and Venu Sports will remain a mere concept rather than an actual offering; the injunction would be expected to remain in force until the trial.
The core of the case rests in conflicting arguments about the economic and competition impact of Venu Sports, which was supposed to roll out this fall for $42.99/month, on the market for live sports content.
Garnett agreed with Fubo that Venu Sports is problematic, since it entails competing media companies joining hands to place their live sports content on one platform. Garnett worried that arrangement, which included the defendants agreeing to “steer clear” of investing in similar streaming platforms, might stifle innovation or lead to higher prices for consumers. In an amicus brief filed last month, President Joe Biden’s Department of Justice and New York Attorney General Letitia James, along with Democratic attorneys’ general of 15 other states and the District of Columbia, supported Fubo’s position in an amicus brief filed last month.
The counter view is Venu Sports would provide consumers with what they want and what the market demands: an affordable live sports streaming platform. In court documents the defendants say Venu Sports is tailor made for “price-conscious sports fans who have dropped out of, or never been part of, the traditional TV ecosystem.”
The defendants, backed by an amicus brief filed by the attorneys general of Florida, Alabama, Iowa, Kentucky, Mississippi and South Carolina, stress that Venu Sports would offer nonexclusive content—so viewers don’t have to buy Venu Sports to see it—and wouldn’t include other popular sports and non-sports networks such as NBC, CNN and Fox News.
Another consideration in the case is whether the defendants will remain committed to Venu Sports if it remains blocked by the courts. They are competing businesses, after all, and could drop Venu Sports to pursue other collaborations that are less likely to attract antitrust rebuke and court-ordered delays.
