Finally Done With Venu
Venu has imploded again, but this time, I am not sure it will ever recover. This saga has been going on and on and on it seems, but finally, it has ended. I am glad I finally sold those Disney shares so I could enjoy this as a neutral instead of coping with this failure.
First, Venu’s struggles at existence. Six days ago, I, and many others, wrote about Disney basically bribing Fubo out of their lawsuit. Venu, a sports-centered service with games from Fox, Warner Bros., and Disney was going to be pretty cheap, around $40 a month, and carry a ton of sports. Stuff like college football, the NFL, college basketball, and much more would have been carried. Fubo, which is a streaming service centered almost entirely around sports, rightly saw Venu as an existential threat, so they sued, alleging antitrust violations. A judge thought that Fubo had a decent case, so while the case was proceeding, the judge ordered Venu to halt all business activity. Disney, which was spearheading this effort for Venu, then bribed Fubo, basically. Disney gave them a few hundred million for like 85% of the company, allowed them to use some ESPN programming, and set in motion a sort of merger between Hulu’s live sports division and Fubo, for a few years from now.
I thought this was a great deal for Fubo. Fubo was basically teetering towards death. Their stock is worth so much less than it used to be that if you round, their stock is down 100% from a few years ago. They were pretty much in last place in streaming, their capex requirements were only going to increase from here, and it seemed like Fubo was just going to go out with a whimper in a few years. Then, they dropped this lawsuit, and Disney gave them a bunch of money (a few hundred million) to shut up.
On the other hand, I thought Disney got ripped off basically, or at the very least, that this was pointless. I thought that it was inevitable that someone else would sue, and we would have to go through this whole thing again. I did not make it a massive part of my article because I assumed someone had thought of that and had constructed some backdoor agreement with potential opponents.
Instead, I woke up this morning, watched Tottenham almost draw to a club from the middle of Nowhere, England, and read in the WSJ that the Venu project is being shuttered. Dish, the third-place cable company, announced plans to file a lawsuit and stop Venu from progressing, taking Fubo’s place. That would have been annoying, and possibly Venu-ending, but then DirecTV also announced that they would be filing a lawsuit to halt Venu. That announcement was the nail in the coffin, and Disney, Fox, and Warner announced:
“In an ever-changing marketplace, we determined that it was best to meet the evolving demands of sports fans by focusing on existing products and distribution channels,”
AKA, “Fine, we give up. You losers obviously are not going to let this happen, so we will just wait five years until all of you don’t exist anymore, and then we will form a pretty much identical bundle.”
This is not that bad for these companies. Disney comes out of this the best because they now own Fubo, they still have a ton of sports, and ESPN is launching its own DTC service that will basically just be Venu-Lite.
That said, this is certainly not a great look for these three companies. They all need sports to keep consumers entertained. Over 95 (AKA 96) of the 100 most popular events on TV in 2024 were sports, according to Nielsen. The only way that any three of these companies can stay ahead of the curve, ahead of Netflix, is via sports. In that, Disney is still positioned the best, Fox is irrelevant to me, and Warner is a failure.
I do not regret selling out of Disney, and really, this changes nothing in the grand scheme of things. Warner just still…sucks. These guys just suck, and Venu is another failure from them.
