By Zaheer Kachwala and Dawn Chmielewski

(Reuters) - Walt Disney, Fox and Warner Bros Discovery on Friday abandoned plans to launch Venu Sports, their live sports joint venture, pulling the plug on the much-heralded effort after it ran into substantial legal opposition.

Shares of Warner Bros Discovery were down 4.6%, Fox's stock fell about 2%, while Disney lost 1.5% after the surprise announcement.

Venu was meant to attract sports fans who either canceled or never subscribed to cable TV - but quickly ran into legal troubles. Smaller streamer FuboTV, which sued on antitrust grounds, claiming the media partners had extended Venu rights it refused to grant other distributors, giving the service an unfair competitive advantage. Fubo shares rose about 1% on Friday.

"After careful consideration, we have collectively agreed to discontinue the Venu Sports joint venture," the companies said.

Disney appeared to have removed a legal obstacle earlier this week after it agreed to buy a majority stake in FuboTV and merge it with its cable-like Hulu+ Live TV service. As part of the deal, Fubo agreed to drop its lawsuit against Venu Sports.

But that didn't resolve Venu's legal headaches. Satellite TV providers Dish parent EchoStar and DirecTV sent letters to the federal district court judge Thursday, arguing the settlement did nothing to resolve the underlying antitrust issues for competitors.

The three media companies decided to scrap Venu that same day, on concerns it would be an ongoing drain on time and resources, concluding they could reach young sports fans through deals with existing pay TV distributors, according to a source familiar with the matter.

"Obviously, this is a shock as it perfectly demonstrates the complexities of the U.S. landscape in trying to bring a service to market, almost akin to a spaghetti junction," said Paolo Pescatore, an analyst at PP Foresight.

Media companies have been investing large sums to bring audiences to their platforms and boost viewership. But the bundle had been expected to be priced at $42.99, which may have run into resistance from cost-conscious consumers already faced with numerous streaming choices.

"Even when frenemies agree to work together, legal and logistical issues can be too much to overcome," said Ross Benes, senior analyst at Emarketer. "Venu's short life was preceded by Quibi and CNN+. It is survived by three media conglomerates struggling to make sense of a changing world."

Venu had plans for 5 million subscribers in its first year.

Last year, FuboTV had won a court order that had blocked the venture, a move supported by the U.S. Justice Department and 16 U.S. states.

"We look forward to working with our programming partners - including Disney, Fox and Warne Bros Discovery - to compete on a level playing field to deliver sports fans more choice, control and value," DirecTV said on Friday.

Disney, Fox, Warner Bros and Fubo did not immediately respond to requests for comment.

(Reporting by Zaheer Kachwala, Jaspreet Singh, Deborah Sophia and Akash Sriram in Bengaluru and Dawn Chmielewski in Los Angeles; Editing by Shounak Dasgupta)