What’s on deck:
But first, looks like there’s a flag on the play.
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The big story
A false start
A bid to launch a new sports streamer has opened a can of worms for the media industry.
Venu Sports, a joint venture between Disney, Fox, and Warner Bros. Discovery, faced a major setback when a judge blocked its launch on the eve of football season’s kickoff. But the issue isn’t specific to Venu, as how media companies bundle services for customers could eventually be called into question, writes Business Insider’s James Faris.
Some background: Initial details of Venu turned plenty of heads in February. Sports are media companies’ crown jewels since they’re one of the few things people still watch live.
But there were also signs of potential roadblocks. BI’s Peter Kafka spoke to industry execs at the time who said sports leagues and pay-TV providers blindsided by the news might push back on the endeavor.
FuboTV, a virtual pay-TV provider, eventually filed a lawsuit, alleging Venu had an unfair advantage. Not unlike Venu, Fubo tried to launch a sports-specific streamer. But the media giants required it to include non-sports channels that ballooned the price to $80.
But when the media giants launched their sports streamer, the same rules didn’t apply. They didn’t force non-sports channels in, allowing them to keep the price to just $43.
Last week a judge granted Fubo a preliminary injunction, halting Venu’s launch. But if things escalate to a jury trial, the tried-and-true practice of creating forced bundles could eventually be called into question.
Venu’s delayed launch has some immediate impacts, but others will take time to develop.
While Venu’s plans haven’t been completely crushed, the significance of facing a delay on the cusp of America’s favorite sport’s season — football — can’t be overstated. College football starts Week 0 this Saturday while the NFL season opener is September 5, meaning fans will have figured out alternative streaming options long before Venu resolves its issues.
(Even if Venu got the green light, it’s still missing a ton of important sports, including NFL games on CBS and NBC, as Peter previously pointed out.)
But the broader implications on how television is, or isn’t, bundled will take a bit more time. The Venu-Fubo dispute will likely be a drawn-out legal fight. (The real winners are always the lawyers.)
The TV bundle has faced a ton of pressure in recent years. Bundling can also lead to some unique consequences, like Disney+ adding Hulu shows only for parents to freak out about their kids getting unintentionally exposed to more mature content, writes BI’s Katie Notopoulos.
But you don’t last this long as a business model without having some resiliency. And…dare I say…bundles aren’t that bad. I’m signed up to so many streaming services that cutting the cord was almost a wash from a financial perspective.
The end result could be media giants offering a concession that’ll keep bundles alive, like Charter and Disney’s arrangement last year, which Peter pointed out to me.
Fubo’s sports-focused bundle initially was geared toward soccer fans — a sport that’s not really the core of Venu’s offering — which potentially leaves room for some type of compromise.
News brief
Top headlines
3 things in markets
- Elon Musk is Too Big to Fail 2.0. Musk’s Twitter takeover is the worst buyout deal for banks since the 2008 financial crisis. The $13 billion Musk took out in loans has been stuck on banks’ balance sheets, largely due to X’s poor performance. That’s cut into bankers’ pay and their ability to finance other deals. And yet, Wall Street still wants to work with him.
- Wall Street weighs in on the presidential election. Executives are opening their wallets for what is shaping up to be one of the most contentious presidential elections. Here’s a rundown of the recent donations and endorsements given by more than a dozen Wall Street leaders.
- Adam Neumann’s startup is having some trouble. (No, this isn’t 2019.) The WeWork cofounder’s new venture, Flow, has a stake in a struggling Nashville building. The property, in which Flow is a minority, non-controlling shareholder, is at risk of wiping out its equity investors.
3 things in tech
- AWS CEO hints engineers may need to tap into new skills as AI takes over. In a leaked recording, Amazon Web Services’ CEO Matt Garman told employees that “it’s possible that most developers are not coding” as AI advances. His message wasn’t a dire warning; rather, he was sharing advice with workers.
- An AI-powered mental health startup just scored $30 million from A16z. The money didn’t stop there: Slingshot AI grabbed a fast-follow from Menlo Ventures shortly after leading VC Andreessen Horowitz made it rain. The firm operates an AI-powered chatbot for mental healthcare and was valued around $220 million after the deal, according to one source.
- Leaked doc shows the power players in Google’s new Pixel and Android super-unit. A leadership reorg within the search giant saw the company’s Pixel, Chrome, and Android groups combine earlier this year. BI reviewed an internal document that reveals who holds the chips in the ambitious new unit.
3 things in business
- Too much heat, not enough homes. Cool, coastal cities tend to be the safest places in a heat wave. But they’re also nearly impossible to build new housing in. That shortage is pushing middle-class and working-class families into more dangerous areas, where they face elevated risk from climate change and the extreme heat it brings.
- Childcare probably won’t get cheaper anytime soon. Prices have skyrocketed in the last 25 years, and they’re unlikely to come down in the near future. But the issue is of interest to both the Harris and Trump campaigns, which have each supported tax credits to parents.
- Think twice before seeking a counteroffer at work. Using a competing job offer to negotiate a raise at work may seem like a quick fix for more money. According to a former Microsoft VP, however, it can leave your employer feeling betrayed — and may even ruin your chances for future raises and promotions.
In other news
What’s happening today
- Federal Open Market Committee meeting minutes published.
- Zoom, Target, Macy’s, and other companies report earnings.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. Milan Sehmbi, fellow, in London. Amanda Yen, fellow, in New York.
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