Judge Rules Against Disney-Fox-Warner Sports Streamer As FuboTV’s Lawsuit Advances
A federal judge has denied a bid to dismiss a lawsuit from media giants aiming to pool together their sports licensing rights to form a new streaming service, which was challenged by rival sports streamer Fubo.
U.S. District Judge Margaret Garnett on Monday ruled against The Walt Disney Co., Fox Corp. and Warner Bros. Discovery. The case will proceed to discovery, with a trial set to start next year in October.
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The decision, issued without a written order after oral arguments last week, comes after the court in August temporarily blocked a fall launch of the streaming bundle, which would’ve featured 15 channels of popular live sports. Subscribers would’ve been able to access a number of live, linear channels, including ESPN, Fox, ABC, TNT and TBS, as well as ESPN+. Between the three networks, they have rights to the NFL, NBA, MLB and NHL, plus college sports and pro tennis. They collectively control over half the country’s TV rights to professional and college sports.
The preliminary injunction order found that Fubo would’ve likely prevailed on claims that the partnership will “substantially lessen competition and restrain trade.” If the platform was allowed to roll out, there would’ve been a “swift exodus” of Fubo’s subscribers that would’ve led to the company’s bankruptcy, Garnett concluded.
At the heart of the case are allegations that Disney, Fox and Warners leverage their control of must-have sports to force rivals into carrying dozens of pricey, unpopular channels as a take-it-or-leave-it condition of licensing critical sports channels. These anticompetitive bundling requirements, it alleged, lead to increased costs for consumers because they’re forced to pay for content they don’t watch.
A worst case scenario for the media giants involve a ruling undermining the legality of bundling.
In Monday’s order, Garnett also denied a motion to separate certain claims from the case and transfer them to California federal court.
Before the case heads to trial, the court must still examine on summary judgment whether there’s a factual dispute for a jury to decide.
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