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Fubo CEO accuses Fox, Disney of overcharging for channels

The CEO, David Gandler, said the market doesn't understand how resilient Fubo is against "cartel" programmers.

The CEO, David Gandler, said the market doesn't understand how resilient Fubo is against "cartel" programmers.

The logo of Fubo TV appears on the marquee outside the Times Square studios of ABC television in New York City.
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 chief executive of sports-focused pay television provider Fuo has accused two of his programming partners of bilking the streaming service for access to their channels.

In an interview published by Sports Pro Media on Monday, Fubo CEO David Gandler said Fox Corporation and the Walt Disney Company were overcharging the service “30 to 50 percent” in order to access sports-inclusive channels like the Fox and ABC broadcast networks, Fox Sports 1 and ESPN.

“We’re dealing with complexities around packaging,” Gandler said in the interview. “We’re forced to take on content that we don’t want in order to access ‘must have’ programming.”

Gandler and Fubo have taken exception to plans laid out by Fox, Disney and a former programming partner, Warner Bros Discovery (WBD), which have joined forces to create a new streaming-focused joint veture that will develop and launch a sports service later this year.

The venture, which has yet to be named, will charge between $40 and $50 per month for access to local ABC and Fox stations and affiliates along with ESPN, Fox, TBS, TNT and Tru TV without a traditional cable or satellite package.

Executives at the three companies say the forthcoming streaming service will be another product in the market to offer former cable and satellite customers an option to receive live sports programming. But in a lawsuit filed last month, Fubo accused the programmers of engaging in anticompetitive behavior, noting that they don’t intend to offer general entertainment, lifestyle or news channels in the sports streaming service.

By comparison, distributors like Fubo are forced to take channels like FX, National Geographic, CNN, Fox News Channel and Fox Business Network as part of a broader carriage deal that includes access to the sports networks they and their customers really want. Gandler has likened the situation to a “cartel” that imposes favorable terms for itself to the detriment of distribution partners.

“For the last seven years, we have provided consumers with a streaming service that was significantly more effective and efficient than cable,” Gandler said on Monday. “We just want to continue that process, and we’re happy to do that again on fair and equitable terms.”

Gandler has another reason to be concerned about the streaming joint venture: After eclipsing more than $3.50 per share late last year, Fubo’s stock price has been hammered since Fox, Disney and WBD announced the formation of their streaming joint venture in early February. Some executive compensation packages are tied to the health of Fubo’s stock price, which closed just north of $1.50 per share on Monday.

While Fubo has posted impressive financial and subscriber growth over the past few quarters — it currently has around 1.6 million customers in the United States who are willing to shell out well over $80 per month for access to more than 100 live channels of content — investors appear rattled that the streaming joint venture could cut into the company’s business, Gandler affirmed.

“No matter what we’re doing, the market has a hard time understanding how we’ll survive…investors don’t believe we can sustain the pressure we’ve applied on these companies,” Gandler complained.

He remained optimistic that the outcome of the company’s antitrust lawsuit will earn it a critical legal win against the programmers whose channels Fubo’s subscribers crave most.

“We haven’t lost a fight yet — I’m not saying we’ll win this one, but I feel pretty confident,” Gandler opined.

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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 11 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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