ESPN, FOX, WBD announce stunning decision to scrap Venu Sports

ESPN, FOX and Warner Bros. Discovery announced on Friday that they will not be moving forward with Venu Sports, their proposed joint sports streaming service, effective immediately.

“After careful consideration, we have collectively agreed to discontinue the Venu Sports joint venture and not launch the streaming service,” the joint statement read. “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.

“We are proud of the work that has been done on Venu to date and grateful to the Venu staff, whom we will support through this transition period.”

The news comes as a major surprise, considering the time and energy the three mammoth companies expended on the venture. The runway seemed to be clear for launch after Disney, the parent company to ESPN, acquired a majority stake in Fubo, a rival in the streaming space, earlier this week.

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This decision killed Fubo’s lawsuit over Venu Sports as part of the merger, which stemmed from its formation last year, blocking the intended debut of streamer last Fall. That ability to end the legal battle, as well as better compete with the likes of YouTube TV, were considered the driving forces behind this merger.

Prior, ESPN, FOX and Warner Bros. Discovery believed Venu Sports to be the future of sports streaming, and the fact that it won’t ever launch after exhaustive work from multiple teams behind the scenes is one of the more shocking developments in recent memory.

More information is sure to leak in the coming days, but for now it’s easy to see why pundits and fans alike are surprised at the revelation.

More on Disney’s acquisition of Fubo, Venu Sports dissolution

Furthermore, Disney will combine its Hulu + Live TV service with Fubo’s operations, as part of the merger. That new entity will have more than 6.2 million North American subscribers. Disney shareholders are going to hold 70% of the venture.

Fubo will own the rest and run the operations behind the service. The two services are expected to be offered separately post-closing and Hulu remains available through a larger Disney bundle. 

Fubo’s sports packages are also going to become more extensive with Fubo getting access to ESPN, ESPN2, ESPNU, the ACC and SEC networks, and ESPN+. Those are all current Disney networks. 

“This transaction represents an incredible opportunity to build a consumer-first, live TV streaming company,” said David Gandler, Fubo co-founder and CEO, in an investor call early Monday. “At deal close, our company is expected to become immediately cash-flow positive, instantly making Fubo the major player in the streaming space.”

Fubo posted a $55 million loss in its most recent fiscal quarter from continued operations. At one point, Gandler even shared Fubo may need to go into bankruptcy if it went on the market. On top of that, the company has seen its stock price drop by more than half in the last year. However, that did rapidly change on Monday when Fubo shares opened up by 170% before retreating somewhat.

Time will tell what this means for other streaming avenues as well, as ESPN was also planning its own new streaming service, currently called Flagship, which appeared to be the company’s top priority.

On3’s Dan Morrison contributed to this article.