Media giants lose bid to dismiss FuboTV’s antitrust lawsuit over Venu

A federal judge has rejected a request to dismiss a lawsuit by media giants seeking to combine their sports licensing rights into a new streaming service, which was challenged by rival sports streamer Fubo.

U.S. District Judge Margaret Garnett ruled Monday against The Walt Disney Co., Fox Corp. and Warner Bros. Discovery. The investigation into the case is continuing and the trial is scheduled to begin in October next year.

The decision, issued without a written order following oral arguments last week, comes after the court in August temporarily blocked the fall rollout of the streaming package, which would have included 15 channels of popular live sports. Subscribers would have been able to access a range of live linear channels, including ESPN, Fox, ABC, TNT and TBS, as well as ESPN+. Between the three networks, they own rights to the NFL, NBA, MLB and NHL, as well as college sports and professional tennis. Together they control over half of the national TV rights for professional and college sports.

The injunction noted that Fubo would likely have prevailed on claims that the partnership would “significantly reduce competition and restrict trade.” If the platform was allowed to launch, there would have been a “rapid exodus” of Fubo subscribers, leading to the company’s bankruptcy, Garnett concluded.

At the heart of the case are allegations that Disney, Fox and Warners are exploiting their control over must-watch sports to force rivals to carry dozens of expensive, unpopular channels as a crucial condition for licensing critical sports channels. These anti-competitive bundling requirements allegedly resulted in higher costs for consumers as they were forced to pay for content they did not watch.

A worst-case scenario for the media giants would be a ruling that undermines the legality of bundling.

In Monday’s order, Garnett also rejected a request to sever certain claims from the case and transfer them to California federal court.

Before the case goes to trial, the court must make a summary judgment to determine whether there is a factual dispute that a jury must decide.