On February 7, the “sports-first” live TV streaming platform that sees former Wall Street financial analyst John Janedis serve as its Chief Financial Officer issued a statement acknowledging an announcement that a new OTT platform devoted to live sports was in the works from three major media and entertainment companies who agreed to collaborate on the effort. FuboTV Inc. came just shy of dismissing the “Hulu for Sports” in the works from The Walt Disney Co., Warner Bros. Discovery and FOX Corporation, while also noting, “The underlying motives and implication of this joint venture also command our scrutiny.”
Indeed, that statement appears to have merit to FuboTV, as it filed an antitrust lawsuit in a New York federal district court against the trio of media giants in a move designed to put a stop to its plans.
FuboTV filed the lawsuit on Tuesday in the U.S. District Court for the Southern District of New York on Tuesday. A PACER filing of the lawsuit had not yet been publicly posted as of RBR+TVBR’s Tuesday news deadlines. However, the company confirmed the legal action following the closing bell on Wall Street.
The focus of the legal challenge is based on the belief that Fubo was prohibited from carrying a small bundle of sports-oriented channels from the three companies, and that these channels are to be included in the forthcoming subscription video-on-demand service that WBD, Disney and FOX believe will be ready for launch by the end of 2024.
A jury trial and punitive damages against Warner Bros. Discovery, ESPN parent Disney and FOX are being requested by Fubo.
“For decades, Defendants 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, the company said in its court filing, first shared by The Wall Street Journal midday Tuesday.
In Fubo’s view, the power the three companies hold over “commercially critical sports content” forces Fubo to broadcast “unwanted, expensive content.” This, Fubo says, prevents it from offering “the sports-centric package of channels that its customers want,” the suit said.
Fubo also said in the lawsuit that it is being charged above-market prices, and said the creation of the “Hulu for Sports” OTT platform would give the three media companies more reason to not make their content available elsewhere.
David Gandler, co-founder and CEO of Fubo, commented, “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.”
Fubo shares, which trade on the NYSE, have dipped from a $3.56 close in mid-December 2023 to a $1.94 close seen on February 7, when news of the sports-focused SVOD first surfaced.
Fubo shares at Tuesday’s Closing Bell were priced at $2.00.
