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Fubo seeks second congressional hearing on pay TV industry woes

The logo of Fubo TV appears on the marquee outside the Times Square studios of ABC television in New York City. (Photo via LinkedIn, Graphic by The Desk)
The logo of Fubo TV appears on the marquee outside the Times Square studios of ABC television in New York City. (Photo via LinkedIn, Graphic by The Desk)

Fubo is urging federal lawmakers to hold another Congressional hearing on the state of the pay television industry, with a request that they pay specific attention to a forthcoming sports-inclusive streaming service being launched by two of its programming partners.

In a letter sent to several House and Senate lawmakers on Thursday, Fubo reiterated its position that the streaming service being developed by Fox Corporation, the Walt Disney Company’s ESPN and Warner Bros Discovery (WBD) had the potential to further solidify the broadcasters’ market dominance with respect to live sports programming and harm consumers by creating an eventual scenario where they had fewer choices to access their favorite team’s games.

Earlier this year, the broadcasters announced they were forming a joint venture that would aim to launch a sports-inclusive streaming service by the fall, just in time for the National Football League’s (NFL) regular season. Fox and ESPN hold the rights to certain football games, while all three broadcasters share rights to other popular live sports from Major League Baseball (MLB), the National Hockey League (NHL) and the National Basketball Association (NBA) amongst themselves and with others.

What sets the joint venture apart from other services is that Fox, Disney and WBD have no plans to include their non-sports channels in the subscription offering. By comparison, cable, satellite and streaming cable-like services — including Fubo — are typically required to carry non-sports channels in their programming packages as a condition of offering highly-sought sports channels to consumers.

Fubo sued the three broadcasters earlier this year, arguing their plans for a joint venture were anticompetitive and put pay TV programmers at a disadvantage by requiring more-stringent carriage conditions than they were willing to accept for themselves. Fubo currently has around 1.8 million subscribers who are willing to pay well over $100 per month for a base package of sports and non-sports channels, with the price including taxes and fees that are based on where a subscriber lives.

Now, Fubo is requesting lawmakers hold at least one hearing to explore whether the broadcasters’ plans to launch their own sports service could harm consumers. As described, the hearing appears to resemble one that Fubo CEO David Gandler participated in last September, when lawmakers weighed whether Congress needed to enact or support certain legislation meant to encourage consumer choice and prevent programming blackouts in the pay television space.

“When one vertically integrated company has the power and incentive to drive out its competitors – as this [joint venture] will – policymakers have previously stepped in to protect competition and consumers,” Fubo wrote in its letter to lawmakers on Thursday. “In the 1992 Cable Act, Congress enacted new program access rules that prevented vertically integrated cable operators from discriminating against new entrants in the pay-TV business, namely the then-nascent satellite TV providers trying to compete with cable. We are at the same inflection point now.”

Fubo was joined by a coalition of industry peers, including DirecTV and Dish Network, which previously supported Fubo’s side in the antitrust lawsuit through affidavits filed by top executives, The Desk reported last month. Newsmax, which started criticizing pay TV distribution deals after it was abruptly dropped from DirecTV last year, also affixed its signature to the letter.

The letter was also signed by a number of public interest groups, including the Sports Fan Coalition, which operated the not-for-profit streaming service Locast until 2021. Locast offered local ABC, CBS, Fox and NBC stations through the Internet, and drew criticism from the broadcasters over its lack of carriage deals or financial compensation to them. A federal judge ruled Locast operated beyond the scope of a recognized not-for-profit by using funds raised through donations to expand its service, and thus was committing copyright violations by not compensation the broadcasters.

Fox, ESPN and WBD have not addressed Fubo’s letter directly, but did say in a statement that the forthcoming service would be “pro-consumer” in that it targets “a segment of viewers who currently aren’t served” by options currently available to them.

“It will expand consumer choice by creating an incremental, nonexclusive option for this segment of viewers to watch their favorite sports,” the broadcasters said in an email sent to The Desk on Thursday.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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