Fubo Sues Disney, FOX, WBD Over Sports Streamer

FuboTV has filed an antitrust lawsuit against The Walt Disney Company, FOX Corporation and Warner Bros. Discovery (WBD) over their planned sports streaming service.

FuboTV, which bills itself as a “sports-first cable TV replacement product,” maintains that Disney, FOX and WBD have engaged in a “years-long campaign to block Fubo’s innovative sports-first streaming business.” The upcoming joint venture “steals Fubo’s playbook and is the latest example of this campaign,” the company maintains.

David Gandler, co-founder and CEO of Fubo, said: “Each of these companies has consistently engaged in anticompetitive practices that aim to monopolize the market, stifle any form of competition, create higher pricing for subscribers and cheat consumers from deserved choice. By joining together to exclusively reserve the rights to distribute a specialized live sports package, we believe these corporations are erecting insurmountable barriers that will effectively block any new competitors from entering the market. This strategy ensures that consumers desiring a dedicated sports channel lineup are left with no alternative but to subscribe to the defendants’ joint venture.

“We have previously collaborated with each of these companies so that we could offer ‘must-have’ sports content to Fubo customers. For many years, they have challenged our business at every opportunity through pernicious practices. While other new competitors were prevented from entering the market, Fubo has continuously fought back. The defendants’ unconscionable practices have impacted our ability to grow and have deprived consumers of a compelling and competitively-priced product. Simply put, this sports cartel blocked our playbook for many years and now they are effectively stealing it for themselves.

“Silence is no longer an option. The fact that live sporting events dominated television viewership in 2023, with 97 of the top 100 broadcasts, highlights the critical importance of sports in entertainment and the necessity for its broad dissemination. Reports that the Department of Justice intends to look into the joint venture are encouraging, and it evidences the potential negative and widespread impact this alliance will have. Fubo seeks equal treatment in terms of pricing and all relevant conditions from these media giants to ensure we can compete fairly for the benefit of consumers. Our customers deserve access to a competitively priced offering with innovative features designed by Fubo for an unparalleled sports viewing experience.”

In its complaint, Fubo alleges that the three companies have “leveraged their iron grip on sports content to extract billions of dollars in supra-competitive profits by engaging in practices causing consumers to pay more for highly popular sports content and resulting in significant damages to both Fubo and its customers.”

Those practices include bundling, with Fubo maintaining that the defendants want it to carry “dozens of expensive non-sports channels that Fubo’s customers do not want as a condition of licensing the defendants’ sports channels.” It also highlights content licensing rates that are 30 percent to 50 percent higher than rates they charge other distributors and “non-market penetration requirements. These actions individually and collectively increase the costs Fubo must pass onto customers. Fubo believes it has incurred billions of dollars in damages as a result of the defendants’ actions.” Fubo also alleges that the defendants have restricted it from offering “compelling streaming products that consumers would find desirable, despite similar products being offered by other traditional pay-TV and streaming services,” including Hulu.

The legal complaint sees to enjoin the joint venture or require economic parity of licensing terms and “substantial damages.”

Earlier this month, ESPN, FOX and Warner Bros. Discovery agreed to form a joint venture to launch a sports streamer that will combine their portfolios of sports networks and some DTC assets. The new service is targeted for a fall 2024 launch via a new stand-alone app, with the ability to bundle that subscription with Disney+, Hulu and/or Max. It would deliver access to ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS and truTV, as well as ESPN+. Each entity will own a third of the joint venture, with equal board representation, and license their sports content to the joint venture on a nonexclusive basis. Pricing will be announced in due course. The platform will feature NFL and UFL football, NBA and WNBA basketball, MLB coverage, NHL, a raft of college sports, the PGA Tour, Wimbledon and the US Open, the FIFA World Cup, Bundesliga, Formula 1 and more.