Fubo Sues Disney, Fox and Warner Bros. Discovery to Block Sports Streaming Deal

“Each of these companies has consistently engaged in anticompetitive practices that aim to monopolize the market,” Fubo cofounder and CEO David Gandler says in Tuesday’s filing

Courtesy of Fubo

Fubo is suing Disney, Fox and Warner Bros. Discovery, accusing the companies of engaging in a years-long campaign of anticompetitive practices to block the sports streaming platform’s business.

The antitrust lawsuit alleges that the companies 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 suit adds that the recently announced sports streaming joint venture “steals Fubo’s playbook and is the latest example of this campaign.”

“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,” Fubo cofounder and CEO David Gandler said in a statement.

“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.”

Disney and ESPN declined to comment, while representatives for Fox and Warner Bros. Discovery didn’t immediately return TheWrap’s request for comment.

The unnamed joint venture, which is scheduled to launch this fall, will provide subscribers with 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.

Content will include 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.

The venture will have its own independent management team, with each of the three media giants owning one-third of the company. Disney, Fox and Warner Bros. Discovery will also have equal board representation and can license their sports content to the joint venture on a non-exclusive basis.

Pricing details and a name for the service will be disclosed at a later date, though an individual familiar with the matter told TheWrap that the price point would be cheaper than YouTube TV, which charges $72.99 per month for its basic plan.

Despite the one-third ownership stake for each company, the individual emphasized that the networks will not share revenue from the venture equally, with the companies expected to earn a similar carriage fee rate as they do through other distribution channels where their networks are available.

In addition to the venture, Fubo’s complaint slammed the companies for forcing it to carry dozens of expensive non-sports channels that its customers don’t want as a condition of licensing sports content.

It also claimed that the licensing rates are as much as 30% to 50% higher than those charged to other distributors and that they impose non-market penetration requirements, or the percentage of total subscribers to which a content package must be sold to or cannot exceed.

Fubo argues that these actions individually and collectively increase the costs that it must pass onto consumers, resulting in billions of dollars of damages. It also says that it has been restricted from offering a compelling and desirable product for consumers that is already offered by other streaming services and traditional pay TV services.

The suit aims to prohibit the joint venture or alternatively impose restrictions in order for it to proceed, such as economic parity of licensing terms and substantial damages.

“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,” Gandler added.

“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.”

Shares of Fubo, which are down 11.8% in the past year, closed at $2 apiece at the end of Tuesday’s trading session.

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