FuboTV sues Disney, Fox & Warner Bros Discovery over joint sports streaming plans

Filed in New York federal court today, the lawsuit contends that the vertically-integrated media organizations have for years systematically attempted to impede its sports-first streaming business through the practice of ‘bundling’ offerings from across platforms to offer as unified products to consumers. As a result, the company says, competition in the sports streaming space has been stifled and Fubo has been forced to unfairly adapt and offer non-sports channels to remain competitive in the marketplace.

The crux of Fubo’s complaint, however, centers around the upcoming launch of a sports-streaming joint venture by the defendants, which Fubo claims not only pilfers its playbook but represents the culmination of an extensive and illegal effort to undermine its service and cut out competition in the sports-focused streaming market.

Announced February 6 and slated to launch later this year, the planned service will bring together a handful of channels including ESPN, Fox Sports, ABC, TBS and TNT, in addition to other sports content, to be offered as a bundled service.

As part of the planned deal, Fubo says the media conglomerates are attempting to bar it from carrying its own “small bundle of sports-focused channels that they are now looking to include in the new service,” according to a report from the Wall Street Journal.

The US Department of Justice is already planning to launch an antitrust investigation into the joint venture, according to a report last week from Bloomberg Law.

“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,” said David Gandler, Fubo’s co-founder and chief executive officer in a statement on Tuesday. “This strategy ensures that consumers desiring a dedicated sports channel lineup are left with no alternative but to subscribe to the defendants’ joint venture.”

Collectively, Disney, Fox, Warner Bros Discovery and their subsidiaries already control over half of the US sports rights market.

Additionally, Fubo argues that the media giants’ exorbitant content licensing rates – which it says surpass those of other distributors by as much as 30-50% – are anti-competitive.

Fubo also says the media organizations impose non-market penetration requirements on it, which drives up costs for the streaming platform and, by extension, its customers.

“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,” Gandler said.

The executive went even farther, accusing Disney, Fox and Warner Bros Discovery of effectively stealing Fubo’s playbook, emphasizing that the sports “cartel” has endeavored to block Fubo’s progress for years.

Though Fubo has previously worked with Disney, Fox and Warner Bros Discovery, Gandler said in a statement that, even as partners, these media organizations “challenged [Fubo’s] business at every opportunity through pernicious practices.”

Fubo alleges that it has ”incurred billions of dollars in damages” as a result of actions taken by Disney, Fox and Warner Bros Discovery.

The streaming platform, which was founded by Gandler and two others in 2015, is seeking an injunction against the new joint venture or serious restrictions on the deal, like an agreement of economic parity of licensing terms and financial damages to be paid to Fubo.

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