DirectTV and EchoStar Raise Concerns Over Disney and Fubo's Settlement

On Monday, Fubo announced its strategic move to merge with Hulu + Live TV, dropping its lawsuit against Disney, Fox, and WBD. The lawsuit alleged these companies collaborated on Venu Sports, violating US antitrust laws. The settlement allows the creation of a new multichannel video programming distributor (MVPD), where Disney would hold a 70% ownership stake. This agreement effectively lifted a previously imposed injunction by US District Judge Margaret M. Garnett, which had been blocking the launch of Venu since last August.

Concerns from DirectTV and EchoStar

The settlement has sparked concerns among industry players, particularly DirectTV and EchoStar. They assert that Venu Sports' potential market entry, bolstered by Fubo's proposed merger with Hulu, might intensify existing anticompetitive challenges within sports streaming. DirectTV, in a letter to Garnett, criticized the settlement, claiming that Fubo received compensation from Venu's partners "to ensure cooperation from an aggrieved competitor," but this move also "restores an anticompetitive runway for the JV Defendants to control the future of the live pay TV market."

DirectTV is one of several entities expressing "grave concerns" about Venu's competitive impact. Their lawyers argue that Venu’s content offering advantages would not be extended to DirectTV or other distributors, potentially harming competition.

EchoStar's Critique

EchoStar shared its apprehensions in a separate letter to Judge Garnett, highlighting the original injunction's role in blocking a purported scheme by Disney, Fox, and WBD to monopolize the pay-TV market. They fear this could lead to inflated prices for consumers. EchoStar's legal team stated, "The parties' settlement appears designed to eliminate court jurisdiction over this multifarious harm by effectuating the preliminary injunction's expiration, rather than addressing the underlying competition issues." They warned that the injunction's dismissal might lead to antitrust injuries for companies like DISH, Sling, and others.