Venu Sports, the proposed sports streaming joint venture from Disney’s ESPN, Fox and Warner Bros. Discovery, has been scrapped ahead of its anticipated launch, the companies said Friday.
Venu had been battling legal threats from rivals that put the venture into question in recent days.
Earlier this week, Disney made a deal with FuboTV, which included the streaming TV provider quashing its lawsuit against Venu that had appeared to pave the way for its launch.
But new threats emerged from DirecTV and Dish in the last 24 hours, which played a role in the surprising decision to kill the service, according to sources close to the situation.
“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 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,” the companies added.
The debut of the sports streaming service had been delayed in part by a lawsuit from streaming rival Fubo which accused Venu’s partners of engaging in anti-competitive practices that would thwart competition for sports fans.
The move to scrap Venu also comes a day after DirecTV challenged the dismissal of Fubo’s lawsuit against Venu, saying it did not resolve antitrust issues connected to the joint venture.
Dish also chimed in early Friday with similar threats.
A source with knowledge said the new legal threats played a role in the decision to scrap Venu.
After announcing the Fubo settlement on Monday, Disney said it would merge its Hulu + Live TV business with Fubo.
As part of the deal, Fubo asked the US District Court in Manhattan on Monday to drop its lawsuit against the media giants behind Venu, the sports bundle that was supposed to launch last fall.
The merged company will create the second-biggest online pay-TV provider in North America, behind YouTube TV, with around $6 billion in revenue and 6.2 million subscribers.
According to a source, Disney, which will hold a 70% stake in the new company, felt its deal with Fubo filled gaps in the market that it had originally hoped Venu to fill.
The person said that the marketplace is has changed since Disney, Fox and Warner Bros Discovery announced last February that it would launch Venu, which would combine the sports assets of the three companies.
At issue was a practice known as “bundling,” in which TV distributors like Fubo are forced to carry networks that “consumers rarely watch” to gain rights to prized live sports programming. Fubo argued it was unable to gain the rights to create a sports-centric service, in the mold of Venu
The Fubo deal gives customers more flexibility to select a slimmed down bundle versus a pricier cable bundle.
In September, Disney also entered into a deal with DirecTV, giving customers similar flexibility to customize their bundles with Disney’s suite of channels and streaming services.
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