A preliminary injunction hearing for Fubo’s legal battle against Fox, Disney and Warner Bros. Discovery’s sports streaming joint venture has been set for Aug. 7 at 9:30 a.m. by the U.S. District Court for the Southern District of New York. The hearing will continue on Aug. 8 and Aug. 9, if necessary.
The move comes after sports streamer Fubo filed an antitrust lawsuit in February, alleging that the trio of studios have engaged in a years-long campaign of anticompetitive practices to block its business, with their joint sports streaming 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” through charging consumers more for sports content, resulting in damage to both Fubo and its customers. The complaint 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. Fubo also claimed that its licensing rates are as much as 30-50% higher than those charged to other distributors.
“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,” a Fubo spokesperson previously told TheWrap. “Customers deserve choice, fair pricing and innovative products, and this is only possible in a competitive streaming market.”
According to the court order reviewed by TheWrap, the parties will have until April 22 to serve requests for documents related to the case and May 10 for responses and objections to those requests.
June 7 will be the deadline for “substantial completion” of handing over those documents. The parties must serve preliminary witness lists by June 10. The fact discovery period will close on June 28.
The defendants are supposed to provide expert rebuttal reports by July 10. Expert discovery will close on July 25 and defendants will also have until July 25 to respond to plaintiffs’ motion for a preliminary injunction.
The deadline for the filing and exchange of final fact witness lists and exhibit lists will be July 29, while Fubo’s reply in support of the motion for a preliminary injunction will be due by Aug. 1.
“Given the time restraints at-issue in this case relating to the potential launch of the Defendants’ business combination in late August, post-hearing briefing will not be permitted absent further leave of Court,” U.S. District Judge Margaret Garnett wrote.
Disney, Fox and Warner Bros. Discovery have filed motions to dismiss Fubo’s 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.”
DirecTV and Dish Network executives have issued declarations of support for Fubo, with the former expressing “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.”
In addition to the legal scrutiny from Fubo, House Judiciary Committee ranking member Rep. Jerry Nadler (D.-NY) and Rep. Joaquin Castro (D.-Texas) penned a letter to joint venture executives Bob Iger, David Zaslav and Lachlan Murdoch seeking information on how the offering will affect access, competition and choice in the sports streaming market.
“Without more complete information about the pricing, intent and organization of this new venture, we are concerned that this consolidation will result in higher prices for consumers and less fair licensing terms for upstream sports leagues and downstream video distributors,” the pair wrote.
The lawmakers have given the JV until April 30 to provide responses to 19 questions and asked that the Department of Justice be copied on those responses. Bloomberg previously reported that the DOJ was planning to launch its own antitrust review of the offering.
The unnamed service, set to launch later this year, 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 an independent management team that will be based in Los Angeles.
Analysts have estimated that the JV’s pricing could fall anywhere between $35 and $50 per month. Fox CEO 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 will retain all of the advertising revenue from their content, the individual said.
Murdoch has previously said he’s “not overly concerned” about the potential for regulatory scrutiny, noting 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 Iger recently told CNBC.
The venture is aiming for 5 million subscribers within the first five years of its launch.
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