It may have first appeared to be a surprisingly timed announcement when it was dropped into trade and general media yesterday that VENU Sports, after a tumultuous and legal battle-filled several months of supposed startup, dropped this social media salvo:
Considering less than 24 hours earlier the duo at SPORTS AND MEDIA PODCAST who were reporting Disney’s alliance with FUBO were openly speculating that this effectively greenlit a desired launch by Venu executive by Super Bowl Sunday, and that they were actively filling open positions, this seemed to be an oddly-timed salvo, to say the least. But with the benefit of 20/20 hindsight, we probably saw this coming even more clearly than my friends and neighbors have been seeing firestorms from their porches and terraces.
As he usually does, TOO MUCH TELEVISION’s Rick Ellis offered his post-mortem take in his daily newsletter that was delayed until early this morning because, frankly, those firestorms are taking a toll on a lot of us:
This decision is a costly one for the three media companies. They reportedly have spent a collection $200 million preparing the service for launch, along with an equal amount to buy off rival sports streamer Fubo TV.
I suspect you could write a business school tell-all book laying out what went wrong over the past year. But at the end of the day, this failure all came down to hubris.
Executives at the three media companies apparently believed they could cut themselves a sweetheart deal that would allow them to license their sports content as well as sports-connected linear channels without making the same package available to rivals. And that led Fubo TV to file a lawsuit against the companies and win an injunction to postpone the launch of Venu.
That lawsuit was resolved earlier this week when the three media companies just threw a lot of money at the problem. But with Direct TV/Echostar now promising to file a similar lawsuit, the likely extended delay of the service’s launch made the process problematic.
However, it’s also important to note that the other factor that led to this decision was that the overall business environment has changed substantially in the past year since Venu was announced. Disney decided to move forward with the launch of the beefed up ESPN SVOD service, which seemed like a counterintuitive choice given the simultaneous plan for Venu. Warner Bros Discovery has continued to move more live sports coverage to its streamer Max, as it also lost the rights to the NBA after the current season. The upsides of Venu – including the opportunity to add subscribers numbers to the included live linear TV networks – was offset by the increasingly wonky explanations for why there was a need for Venu at all.
MARKETWATCH’s Emily Bary was even more pragmatic in her writeup from a few hours earlier:
Walt Disney Co.’s streaming strategy is all the more complicated after an action-packed week that began with plans to combine FuboTV Inc. with its Hulu + Live TV product and ended with a shuttering of the Venu Sports joint venture. MoffettNathanson analyst Robert Fishman thinks Disney has enough in its arsenal that it could have proceeded with a sports-focused skinny bundle on its own, without contemplating Venu in the first place or inking the merger agreement with Fubo earlier this week. He’s still not sure about the value of adding Fubo to the mix, noting that the company can still walk away.
On the other end of the empathetic spectrum was ENGADGET’s Lawrence Bonk:
RIP to the entirely hypothetical streaming service Venu Sports…The long-awaited streaming service Venu Sports is no longer happening, according to The Hollywood Reporter and others. The sports-focused streaming service was to be a joint offering by Disney, Warner Bros. Discovery and Fox. There was no concrete reason given, other than corporate-speak.
I probably come closer to Bonk’s views than the others’. I hadn’t exactly been all that positive on the venture from the start. Last spring, we mused about the obsession with the name–a sure sign in my experience that money and time was already being wasted. When the price point and value proposition was revealed over the summer, I chided Venu’s newly appointed CEO on overvaluing what certain partners otherwise not easily available via streaming really brought to the table.
I would further add that as time went on and the only games this entity was involved in involving judges in robes and not zebra-striped shirts it became even clearer that Disney was already fully capable on going its own way, but their partners became even less relevant in the long run. With the loss of the NBA, aside from March Madness it’s arguable that WBD’s most valuable sports franchise are the two CFP games that ESPN licensed to them–with their graphics and promos intact. And as for Fox, as we’ve recently mused they arguably have bigger things to worry about that just their lineup of big-ticket events. By the time this year’s Spring Solstice rolls around, it’s entirely possible Tom Brady may be a full-time Raiders executive, and Rupert Murdoch’s inevitable date with mortality–and the very future of FOX itself–will be that much closer to reality.
So it it entirely possible that Disney was merely going along with this “alliance” to mask their real intent to make its ESPN “flagship” seem all the more desirable and ubiquitously available and as it became clearer that the incoming administration was going to be far more lax on potential anti-trust concerns–especially to companies that throw money at their problems, as we mused just a few days ago, that they “needed” a partnership at all?
You tell me. Even I can spot a trojan horse amidst a firestorm.
Until next time…