The Saga of Venu...And What It Says About the Future of Sports Right
The Most Important Story of the Week for 28-Feb-2025
(Welcome to the “Most Important Story of the Week”, my bi-weekly strategy column analyzing the most important (but often not buzziest) news story of the last two weeks. I’m the Entertainment Strategy Guy, a former streaming executive who now analyzes business strategy in the entertainment industry. Please subscribe.)
I treat the subject of “entertainment” pretty broadly in this newsletter/website. For some folks, “entertainment” seems to boil down to just Hollywood itself or even just the film part. I like to think about it a little more holistically than that.
Of course, one can go TOO broad. I haven’t dabbled in video games or tech very often, considering both just a little too far afield. Same for sports: you could easily have a “sports strategy guy”—trust me, I’ve considered it!—discussing the leagues as they vie for power, attention and money. That newsletter, though, would talk about the future of TV a whole bunch, especially when it comes to the value of media rights deals. It’d be tough to discuss the sports business without discussing the entertainment industry, and vice-versa.
Indeed, in some ways, sports rights are the canary in the TV coal mine. When live sports finally depart from traditional TV (if they ever do), that bundle may collapse, and revenues for media rights may collapse too. But we haven’t seen those reverberations yet (except in one minor, but important case).
Let’s look at the sports and media landscape then, because it reveals the central tension at the heart of the traditional-to-streaming transition, and also the worry for everyone: the future won’t make as much money as the past.
Before we dive in, I love writing these strategy takes, but they do take time to put together. If you’d like more of these, please subscribe!
Most Important Story of the Week - Venu Dies So Other Sports Platforms May Live
For those not following, here’s a short retelling of the “Saga of Venu”1…
Last year, Disney/ESPN, Fox and Warner Bros. Discovery announced a joint venture called Venu, which would bundle all of their live sports into one streaming app.
Fubu (a vMVPD) sued to stop the new joint venture, citing antitrust concerns.
Fubu won an injunction, stopping Venu’s launch. (I wrote about it here.)
President Trump won the 2024 election…
…so Fubu agreed to a merger with Disney!
That presumably would have headed off any lawsuits. But not so! Other MVPDs—especially satellite providers—threatened to continue the suits.
And then the trio of companies announced in January that Venu was dead.
That’s clearly the biggest story of the last two months. In streaming/TV, everyone wants to be the one platform to rule them all (in this case, sports rights). Venu had maybe been the leader to win that battle for sports media rights, and now it’s gone.
Indeed, that story also explains a lot of other headlines I had my eye on the last few weeks too…
Quietly, Disney announced it withdrew from the F1 sports rights battle.
Less quietly—and much less noisily than when Warner Bros. Discovery lost their NBA rights—ESPN ended its negotiations with the MLB to renew their media rights deal.
Also, kinda quietly, Netflix acquired the 2027 and 2031 Women’s World Cup in the US and Puerto Rico.
Then, kinda loudly, Netflix hinted it may bid on either the NFL or F1 rights in the future.
Amazon also bought two more wildcard playoff games for streaming.
So let’s look at all these stories and what they imply about the future of streaming/TV…
The Tension in Sports Rights is the Core Tension in all TV
The Venu saga highlights a major tension at the heart of streaming sports right now.
Customers want their sports all in one place. Call it a platform, UX, interface, or what not. (Heck, they want all their content really, but let’s just focus on sports for now.)
The companies also want one place to distribute all their sports too.
But those multiple companies all want to own that one place, by themselves.
Why would everyone like to own that one place? Because then everyone would have to license their content to you, and you could extract a hefty fee for that privilege. Ironically, those three premises lead to this ironic conclusion:
Customers often hate it when they only have one place to watch their TV. While the UX might be great, the prices usually aren’t.
May I refer you to…the cable bundle of old. I don’t need to go into why customers disliked that outcome, but let’s do it anyways: when one platform controls the entire distribution system, it can pay lower prices for content, but extract higher prices from customers. One way to do this, as the cable companies did, is to make customers pay for the entire bundle. When one platform controls the whole experience, they can use their either monopolistic (in the case of local cable companies) or oligopolistic (in the case of satellite companies) power to dominate.
Indeed, when folks from Europe compare their broadcast economics to America, they often ignore that the existence of local monopolies in America. When America generally deregulated media and entertainment (the key difference from Europe), prices in America went up much higher than on the continent for TV
But streaming has changed this ecosystem. Now customers have many more options to watch entertainment, just not sports. The challenge is that if you want to watch, say, the ten best genre shows on TV last year, that required subscribing to, what, seven different services? (Netflix for Avatar: The Last Airbender, Prime Video for Fallout, Hulu for Shōgun, Max for House of the Dragon, Paramount+ for Landman, Disney+ for Agatha All Along, and Apple TV+ for something, probably.) Meanwhile, to find your shows or films meant constantly switching between all those apps, and that sucks.
(Side Note: TV Kinda Sucks Now)
Let me get a quick rant out of the way: I’ve noticed a weird twist to the streaming wars recently:
The new TV experience kinda sucks.
Especially compared to cable.
I say this as someone who still has cable, but also regularly streams shows. In many ways, the peak of the TV viewing experience probably ended with the “DVR era”. That was when a DVR could record all the shows you wanted to watch—including live sports!—but the linear bundle meant you could easily search to see what else was on. Or sports! In the olden days, or if you have cable now, on a Saturday morning, you could/can switch between football games to find the most compelling matchup.
The new UX does NOT have those features. For example, say you’re a devoted UCLA sports fan who has gone all-in on their amazing women’s basketball team. A few of their games are now streamed on Peacock. But this situation kinda sucks:
If you pause the screen, it goes to an advertisement, not a still of the screen.
Oh wait, that’s just regular shows. For sports, you can’t pause or rewind!
And they don’t have replays of games.
In other words, the streaming experience is much worse than the old televised experience. On other ad-supported services, this same crappy experience exists in one key way: you can’t skip the ads. Imagine if back in 2019 all the pundits celebrating our streaming future had also mentioned, “And it’ll be great, because you won’t be able to skip ads!” That would have tamped down the enthusiasm somewhat!!
Anyways, when folks say they want to own the sports experience, this new, crappier user experience is the destiny, not the “DVR plus TV guide” of old.
End of side rant.
That Core Tension in Streaming Explains the Venu Saga
The Venu saga should be seen, then, in the quest of major companies to “become TV” for all of sports. Of course, only Big Tech has the financial firepower to win that battle, so Disney tried to team with Fox and Warner Bros. Discovery to win via a joint venture.
Let’s summarize each streamer's strategy right now: