DirecTV, Dish Network Back Fubo in Disney-Fox-WBD Sports Streaming Legal Fight

In a motion to dismiss Fubo’s lawsuit, the studios argued it “does not offer any plausible basis to conclude that it will ever suffer antitrust injury” from their joint venture

From L to R: Fox CEO Lachlan Murdoch, Warner Bros. Discovery CEO David Zaslav, Disney CEO Bob Iger and Fubo CEO David Gandler (TheWrap/Chris Smith/Getty Images)

DirecTV chief content officer Rob Thun issued a statement of support for Fubo in its legal fight seeking to block Fox, Disney and Warner Bros. Discovery’s sports streaming joint venture.

“DIRECTV has grave concerns about the effect that the sports content joint venture between the defendants in this case will have on competition for the distribution of sports programming. More specifically, the joint venture partners are offering content in a manner that they do not allow DIRECTV or other distributors to offer to consumers,” Thun said in an affidavit filed on Monday and declaration shared with TheWrap. “Rather, the joint venture partners require that DIRECTV offers a large bundle of channels and do not allow DIRECTV to offer a smaller sports-focused bundle of channels.”

Thun warned that if the studios’ joint sports venture, which is internally nicknamed Raptor, is “permitted to launch while the joint venture partners continue to restrict DIRECTV (or other distributors) from offering a similar consumer offering, consumers will be deprived of meaningful competition from DIRECTV and others.”

According to TheDesk.Net, Dish Network’s Video Services vice president Gary Schanman also provided a written declaration in support of Fubo, though it was sealed by a federal court at Fubo’s request. The outlet noted that the declaration contained “material information” about Dish’s programming deals with Fox and Disney.

DirecTV and Dish’s statements coincide with a motion for a preliminary injunction filed by Fubo on Monday. A Fubo spokesperson told TheWrap that the declarations from Dish and DirecTV “underscore a wider concern in the pattern of anticompetitive practices by the Defendants, not particular to only Fubo, that have hurt consumers.” They added that the company is “also encouraged by the DOJ’s continued investigation into the JV.”

The sports streamer filed an antitrust suit in February, alleging that the trio have engaged in a years-long campaign of anticompetitive practices to block its business, with the joint venture being the latest example.

It argues that Fox, Disney and WBD have “leveraged their iron grip on sports content to extract billions of dollars in supra-competitive profits” by charging consumers more for sports content, resulting in damage to both Fubo and its customers.

The complaint also slammed the companies for forcing Fubo to carry dozens of expensive non-sports channels that its customers don’t want as a condition of licensing sports content. Additionally, it claimed that its licensing rates are as much as 30% to 50% higher than those charged to other distributors.

“We remain steadfast in our fight against the JV and will continue to defend against this threat of irreparable harm to Fubo and consumers more broadly as outlined in the motion,” the spokesperson continued. “We see this as an opportunity to obtain parity of terms and rates for Fubo, which could have a very positive impact on the future of our business. We also see this as an opportunity to level the playing field of the sports streaming industry as a whole. Customers deserve choice, fair pricing and innovative products, and this is only possible in a competitive streaming market.”

Disney, Fox and Warner Bros. Discovery have filed motions to dismiss the lawsuit.

In its motion, Fox said that Fubo has “not invested in its own distribution infrastructure” and “offers little that is particularly unique.”

“With its stock price trading below $2 per share, and its business model under attack by a growing number  of competitors, Fubo brings this lawsuit because it fears that Defendants’ new joint venture (‘JV’)  might further undercut its competitive position. But the antitrust laws exist to promote competition, not to protect Fubo from other competitors,” the filing states. “Fubo does not offer any plausible basis to conclude that it will ever suffer antitrust injury (or any other injury) because of the JV.”

Warner Bros. Discovery added that Fubo’s complaint is “nothing more than a transparent attempt to use litigation to get better commercial terms from its suppliers than it has been able to negotiate at the bargaining table.” It noted that Fubo does not license any sports content from WBD.

“Fubo cannot challenge the planned formation of the JV itself, because it is a new, consumer friendly offering that necessarily increases competition,” the company added. “Indeed, the JV will embody the essence of what the antitrust laws encourage: a new competitor that will increase competition, create  efficiency, and benefit consumers. Since it will not combine any competing businesses, it cannot itself diminish competition.”

The unnamed service, set to launch this fall, will offer access to content from linear sports networks including ESPN, ESPN+, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, FOX, FS1, FS2, BTN, TNT, TBS, truTV, as well as the ABC network. It will include content from the NFL, NBA, WNBA, MLB, NHL, NASCAR, College Sports, UFC, PGA TOUR Golf, Grand Slam Tennis, the FIFA World Cup, cycling and much more. Subscribers would also have the option to bundle the product with Disney+, Hulu and Max.

Fox, Disney and WBD will each own a one-third stake, have equal board representation and will license their sports content to the joint venture on a non-exclusive basis. Former Hulu and Apple executive Pete Distad will serve as the JV’s CEO, reporting directly to the board and assembling the independent management team that will be based in Los Angeles.

Analysts have estimated that the JV’s pricing could fall anywhere between $35 to $50 per month. Fox CEO Lachlan Murdoch suggested it would be in the “higher ranges of what people are talking about.” An individual close to the venture told TheWrap that pricing would be lower than YouTube TV’s $72.99 per month base plan.

When it comes to revenue from the partnership, the companies are expected to earn a similar carriage fee rate as they do through other distribution channels where their networks are available. The trio’s members will each be responsible for selling their own advertising and they will retain all of the advertising revenue from their content, the individual said. 

Fox CEO Murdoch has said that he’s “not overly concerned” about the potential for regulatory scrutiny, noting that the offering is targeting 50 million to 60 million “cord never” households that aren’t currently being served.

“We’re proceeding as though this is going to clear basically government scrutiny,” Disney CEO Bob Iger recently told CNBC.  

The venture is aiming for 5 million subscribers within the first five years of its launch.

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