A potential rival was dealt a setback.
Shares of fuboTV (FUBO 23.53%) were soaring today in response to Friday night’s news that a judge has temporarily blocked a sports streaming service joint venture, Venu, from Walt Disney, Fox, and Warner Bros. Discovery.
The new service was expected to challenge and potentially supersede fuboTV, which has struggled to gain traction since economies reopened after the lockdown period of the COVID-19 pandemic.
As of 11:43 a.m. ET, the stock was up 29.7%.
Image source: Getty Images.
What the ruling says
Judge Margaret Garrett issued an injunction against the new streaming service, which comes after fuboTV filed an antitrust lawsuit against the joint venture.
Garrett noted that Disney, Fox, and Warner Bros. Discovery control 54% of U.S. sports rights, and at least 60% of nationally broadcast sports rights in the U.S., suggesting it’s likely an even larger share. Warner Bros. Discovery’s attorney said during the hearing that an injunction would be terminal for Venu.
The news is clearly a victory for fuboTV, but it’s unclear if it will permanently block the new service.
What’s next for fuboTV?
Competition from the sports media giants could be terminal for fuboTV, so it’s crucial for investors that the decision not be reversed. Even without any other direct comprehensive sports streaming competition, the company has struggled.
It’s delivering solid revenue growth with revenue up 25% to $391 million, but the company is still losing money with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $11 million and a net loss of $25.8 million in the second quarter.
While the company is making progress, it could be upended by a new competitor such as Venu or the expected launch of ESPN’s flagship streaming service next year.
Keep your eye on developments around Venu as it’s likely to impact fuboTV stock.
Jeremy Bowman has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney, Warner Bros. Discovery, and fuboTV. The Motley Fool has a disclosure policy.