Veenu Sports, a proposed sports streaming joint venture between Disney's ESPN, Fox and Warner Bros. Discovery, has been scrapped ahead of its scheduled launch, the companies announced Friday.
Venu has been battling legal threats in recent days from rivals who have cast doubt on the business.
Earlier this week, Disney struck a deal with FuboTV that included dropping a lawsuit against Venu that seemed to pave the way for the streaming TV provider to launch the service.
But sources close to the situation say new threats have emerged from DirecTV and Dish in the past 24 hours, which played a role in the surprising decision to shut down the service.
“After careful consideration, we have jointly agreed to terminate the Venu Sports joint venture and not launch a streaming service,” the companies said in a joint statement.
“In an ever-changing market, we have determined that it is best to meet the evolving demands of sports fans by focusing on our existing products and distribution channels,” the companies added.
The sports streaming service's debut was delayed in part due to a lawsuit from streaming rival Fubo, which accused Venu's partners of engaging in anti-competitive practices that discouraged sports fans from competing.
A move to scrap Venu will also take place the next day. DirecTV appealed the dismissal of Fubo's lawsuit It argued against Venu that antitrust issues related to the joint venture have not been resolved.
Mr. Disch made a similar threat earlier Friday.
A source said fresh legal threats influenced the decision to scrap Venu.
After announcing the Fubo settlement on Monday, Disney announced it would merge its Hulu + Live TV business with Fubo.
As part of the agreement, Fubo on Monday asked a federal district court in Manhattan to dismiss a lawsuit against the major media companies behind Venu, a sports bundle that was scheduled to launch last fall.
The combined company will create the second-largest online pay-TV provider in North America after YouTube TV, with approximately $6 billion in revenue and 6.2 million subscribers.
Disney, which owns 70% of the new company, felt the deal with Fubo would fill a gap in the market that it had originally hoped Venu would fill, according to people familiar with the matter.
The person said the market has changed since Disney, Fox and Warner Bros. Discovery announced last February that they would combine their sports assets to form Venu.
At issue was a practice known as “bundling,” in which TV distribution companies like Fubo buy networks that “consumers rarely watch” to acquire the rights to valuable live sports. be forced to deliver. Fubo claimed it failed to acquire the rights to create a sports-centric service in Venu's mold
The deal with Fubo gives customers more flexibility in choosing slimmed-down bundles over more expensive cable bundles.
In September, Disney also struck a deal with DirecTV to give customers similar flexibility to customize their bundles with Disney's suite of channels and streaming services.
