A federal judge has rejected an effort to dismiss a lawsuit involving major media companies planning to combine their sports licensing rights for a new streaming platform. The lawsuit, brought by rival sports streaming service Fubo, will proceed.
On Monday, U.S. District Judge Margaret Garnett ruled against The Walt Disney Co., Fox Corp., and Warner Bros. Discovery, allowing the case to proceed. The lawsuit will now enter the discovery phase, with a trial scheduled for October next year.
The decision, delivered orally without a written order following last week’s arguments, follows the court’s August move to block the launch of a proposed streaming bundle temporarily. The service aimed to offer 15 live sports channels, including ESPN, Fox, ABC, TNT, TBS, and ESPN+, giving subscribers access to various live and linear programming. The three media companies collectively hold broadcast rights to major leagues such as the NFL, NBA, MLB, and NHL, as well as college sports and professional tennis, controlling more than half of the country’s TV sports rights.
The preliminary injunction determined that Fubo was likely to succeed in its claims that the partnership would “substantially lessen competition and restrain trade.” Judge Garnett concluded that if the platform had launched, it could have triggered a “swift exodus” of Fubo subscribers, potentially driving the company into bankruptcy.
Notably, the case centres on allegations that Disney, Fox, and Warner Bros. Discovery use their control over essential sports content to pressure competitors into bundling numerous expensive and less popular channels as a condition for licensing key sports networks. This practice, described as anti-competitive, is claimed to drive up costs for consumers, who end up paying for content they do not watch.