Disney, Fox and Warner Bros. Discovery withdraws Venu sports streaming service

Disney, the fox and Warner Bros. Discovery Venu has scrapped plans to launch a sports streaming service, the companies said in a joint statement on Friday.

“After careful consideration, we have agreed to discontinue the Venu Sports joint venture and not launch the streaming service,” the statement said. “In an ever-changing market, we decided it was best to respond to the evolving demands of sports fans by focusing on existing products and distribution channels. We are proud of Venu’s work to date and are grateful to Venu’s staff, who will support them during this transition period.”

It was Venus It was first announced in February and plans to combine Fox, WBD and Disney-owned ESPN’s live sports assets. It was originally scheduled to launch before the start of the NFL season in September, but it did partially delayed by a Fubo Internet TV Creators Legal Challenge, He said the platform would be anti-competitive.

Together Disney, Fox and WBD control more than 50% of all US sports media rights, and control at least 60% of all sports rights in the United States, according to the judge in the antitrust case.

The news that it would not launch came as a surprise to Venu employees, who learned late Thursday, according to people familiar with the matter who spoke on condition of anonymity to discuss internal matters. They thought they had a way to launch the service after Disney they agreed this week to merge its Hulu+ Live TV fuboResolving all disputes related to Venu.

But the judge’s response in Fubo’s case called into question the legality of the cable bundle overall, prompting Disney to strike a deal with Fubo that would have given Disney 70% control of the company. And two days ago, satellite providers DirecTV and Dish sent letters to the federal court, arguing that the legal questions raised by the judge remained unanswered.

Rather than risk a lengthy lawsuit that could jeopardize the overall package — including Disney’s efforts to tie up its streaming entities (ESPN, Hulu and Disney+) — the three companies decided to pull the plug on Venu, according to people familiar with the matter.

“DIRECTV continues to be a leader in sports and we look forward to working with our programming partners, including Disney, Fox and Warner Bros. Discovery, to bring more choice, control and value to competitive sports fans in one experience,” DirecTV said in a statement.

Warner Bros. Discovery’s business model is based on negotiating carriage deals for many of its cable networks, including CNN, TNT, HGTV and the Food Network.

Disney is targeting an ESPN “Flagship” launch, including the full ESPN streaming service, by August 2025. The as-yet-unnamed ESPN streaming service will include everything that airs on ESPN’s linear network, unlike ESPN+.

Disney’s deal with Fubo, along with the company’s recent overhaul of the wagon with DIRECTV, also gives the company new ways to package so-called skinny bundles — narrower selections of channels for less money. This was Venu’s idea: to sell a smaller number of linear channels for less money than traditional cable TV.

– CNBC’s Lillian Rizzo contributed to this report.

Disclosure: Comcast, which owns CNBC parent NBCUniversal, co-owns Hulu.