DirecTV questions dismissal of Fubo’s claims against Venu
January 9, 2025
DirecTV, along with EchoStar, have raised concerns about the recently announced dismissal of Fubo’s claims against Venu and its shareholders and the lifting of the preliminary injunction that blocked the launch of Venu pending a full review of the claims against it.
The Court issued its preliminary injunction after concluding that Venu and its shareholders had violated competition laws. The DOJ filed an amicus brief in the case expressing the same conclusion. However, instead of modifying any of the infringing behaviours, Disney opted to merge with Fubo and put Fubo management in charge of Hulu Live as well as Fubo. Fox and Warner Bros Discovery supported the transaction by making cash payments to Fubo.
DirecTV said that “these transactions do nothing to resolve the underlying antitrust violations the Court and DOJ have correctly identified. Rather, it is a form of evading judicial review of the anticompetitive actions of Venu and its shareholders at the collective expense of fans, public institutions, leagues, conferences, teams, and players”.
Thus, DirecTV has sent a letter to Judge Garnett who, in December, denied the JV partners’ motion to dismiss the case based on anti-competitive grounds.
The letter in full:
Dear Judge Garnett
We write in connection with the recent settlement between the Plaintiff and Defendants in the above-captioned matter, and the resulting dismissal by stipulation. Defendants have paid Plaintiff to ensure cooperation from an aggrieved competitor, but the settlement does nothing to resolve the underlying antitrust violations at issue. Instead, this settlement restores “an anticompetitive runway for the JV Defendants to control the future of the live pay TV market.” DIRECTV therefore joins non-party EchoStar Corporation’s request that the Court preserve its legal and factual findings given the significant public interests at stake.
The Court concluded that the Venu joint venture – and the exclusive right to license unbundled sports networks that it would enjoy – would allow Defendants to “drive out competitors” like DIRECTV from the live pay TV market, “all to the detriment of consumers and competition.” The Court enjoined the Venu launch on that basis and denied Defendants’ motions to dismiss additional claims, including “tying” claims under the Sherman Act.1 The Department of Justice agreed that the launch of Venu would “lessen … current competition by giving Defendants a path to collective dominance and foreclosing Venu’s rivals.”
This settlement clears the path for Venu to launch unencumbered by removing the injunction the Court imposed to preliminarily prevent the immediate and irreparable harms the JV launch presents.3 DIRECTV is just one of several non-parties that expressed “grave concerns” about the impact Venu would have on competition for sports programming, given that Venu would “offer” content in a manner that [the Defendants] do not allow DIRECTV or other distributors to offer to consumers.” The preliminary injunction has protected consumers and distributors alike from the JV Defendant’s scheme to “capture demand,” “suppress” potentially competitive sports bundles, and impose consumer price hikes.
By this settlement, Defendants pay off and seek to subsume the very competitor that raised these
antitrust violations to the Court. However, Defendants cannot purchase their way out of the antitrust
violations.
DIRECTV continues to evaluate its options with respect to the joint venture, the parties’ settlement,
Defendants’ tying practices, and other anticompetitive harms, and it joins EchoStar in requesting that the
Court reject any effort by the Defendants to vacate any prior rulings or findings in this case.
Respectfully submitted,
Michael Hartman
General Counsel and Chief External Affairs Officer
DIRECTV