Fubo is doubling down on its mission to take on the proposed sports joint venture between Disney, Fox and Warner Bros. Discovery by again accusing the companies of engaging in anticompetitive practices to block the sports streaming platform’s business.
In February, Fubo filed an antitrust lawsuit arguing that Fox, Disney and WBD had “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.
In Fubo’s first quarter earnings call on Friday morning David Gandler, the sport streamer’s co-founder and CEO, said, “In the first quarter, we spent approximately 90% of our total revenue on content. The exorbitant fees imposed on us and consequently on our customers are well above the market.
“These issues are at the core of our current litigation against the Walt Disney Company, Fox Corp. and Warner Bros. Discovery. We allege that this JV has engaged in longstanding anti-competitive practices aimed at monopolizing the market, suppressing competition and depriving consumers of choice, affordability, pricing and innovation.”
Gandler said the joint venture – which he previously described as “a streaming cartel” – was “an existential challenge” they face, but they were encouraged by the support they have received from competitors.
“DirecTV and Dish who have filed declarations backing our motion for a preliminary injunction against the JV”, he explained, “We have received very strong support from Capitol Hill. Congressman Jerry Nadler of New York and Joaquin Castro of Texas are also concerned that the JV’s control of 80% of broadcast sports content will negatively impact consumers and market competition.”
In April, Congressmen Nadler and Castro sent the joint venture CEOs a letter requesting that they address 19 concerns and demanding these responses be shared with the Department of Justice.
This week, eight co-signers representing companies including Fubo, DirecTV, Dish, Newsmax, and multiple consumer advocacy groups sent a letter to Congress requesting they hold a hearing on the joint venture, Gandler continued.
“We are also encouraged by the DOJ’s reported investigation into the JV. At a minimum, all distributors including Fubo should receive fair and equitable terms from programmers. We should be able to offer our subscribers competitive pricing, packaging flexibility, and the ability to launch innovative products that further enhance the sports streaming experience.”
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”.
The joint venture, 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, and 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 – Disney, Fox and Warner Bros. – owning one-third of the company.
The US District Court has scheduled a hearing for August 7 for Fubo to present its preliminary injunction motion. TheWrap reported last month that Fubo also cut ties with Warner Bros. Discovery after renewal negotiations for their partnership fell through.
The sports streaming platform cited the David Zaslav-led media conglomerate’s “abuse of massive market power” and refusal to “engage in good faith negotiations” as cause for the decision.
Fubo and WBD were in negotiations to renew their content agreement with WBD networks Discovery, HGTV, Food Network and TLC in addition to getting license rights for TNT, TBS and truTV.
Gandler also explained on the Friday morning call that this history of “forcing unfair deals” is why this week Fubo customers lost access to Warner Bros. Discovery networks while negotiating their renewal deal. He said, “We should be able to offer our subscribers competitive pricing, packaging flexibility, and the ability to launch innovative products that further enhance the sports streaming experience.
“We also requested to license the Turner Sports Networks and asked for flexible packaging …WBD did not want to discuss terms. Instead, they offered an extension for the Discovery content on the previous status quo terms [which are] inflexible and above market.”
Gandler also revealed on the earnings call that the sports streamer had exceeded expectations in North America, delivering 1.511 million paid subscribers and $394 million in total revenue, up 24% year on year.
Fubo reported a first-quarter loss that was only half what was expected and bettered its own subscriber guidance.
“Fubo’s first quarter 2024 performance builds upon the strong momentum achieved in the prior year, with double digit paid subscribers, total revenue and ad revenue growth in North America,” Gandler added. “Our results further underscore continued solid execution on our long-term strategy.”
In February, TheWrap exclusively reported Fubo Sports – Fubo’s owned and operated FAST channel – hit an all-time viewership high for its fourth consecutive year, with total hours of content consumed increase nearly 40% year over year in 2023.
December marked the free ad-supported steaming television (FAST) network most-viewed month since its launch in 2019, with total hours up 70% year over year.
In 2023, Fubo Sports streamed a record 340 live sporting events, including baseball, basketball, college football, combat sports, darts, soccer and more.
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