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Fubo stock plummets after Fox, ESPN reveal sports streaming plans

The sports-focused streaming cable replacement says it is concerned that some of its broadcasting partners are launching a rival service.

The sports-focused streaming cable replacement says it is concerned that some of its broadcasting partners are launching a rival service.

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)

Executives at sports-focused streaming television service Fubo have criticized at a plan by some of its programming partners to develop and launch a similar streaming service of their own, one that could drive customers away from their cable-like service and which has convinced some investors to dump Fubo’s stock.

On Wednesday, officials at Fubo warned the formation of a joint venture between Fox Corporation, Warner Bros Discovery (WBD) and the Walt Disney Company’s ESPN had the potential to drive up subscription prices to cable, satellite and streaming cable-like services if their plans move forward.

Like most pay television providers, Fubo has agreements with major broadcast and cable network owners to deliver their live channels and associated programming to subscribers. At the moment, Fubo’s agreements allow them to offer Fox and Disney-owned channels like ESPN, Fox Sports, Fox News Channel, Disney Channel, FX and Fox News, along with local stations and affiliates of Fox and ABC.

The sports-inclusive streaming service being developed by the three broadcasters would offer linear sports channels beyond the cable bundle for the first time — including local feeds of Fox and ABC stations along with national channels like ESPN, Fox Sports 1, TNT, TBS, Big 10 Network and SEC Network — without customers having to receive general entertainment and news channels they may not want.

In this respect, the streaming service stands different from cable, satellite and streaming cable replacements like Fubo, which are typically required to sign agreements with broadcast and cable network owners that force them to carry all the channels in their portfolio, even if they just want to offer sports.

On Wednesday, officials at Fubo said TV fans “have demonstrated that they want an aggregated sports, news and entertainment package differentiated by a quality product experience,” though no research was cited to this effect.

“Fubo has consistently championed the principle of consumer choice, and we’re not surprised more sports streaming options are becoming available,” a Fubo spokesperson said in a statement emailed to some reporters. (The Desk did not receive the statement — Fubo’s main spokesperson, Jennifer Press, has refused to engage with this publication for more than a year.)

“We have already seen that a consortium born of historical competitors is a difficult undertaking, and streaming joint ventures rarely work,” the spokesperson continued, though they offered no specific examples of streaming joint ventures that have failed in the past.

Despite the posturing, the rest of Fubo’s statement revealed the company is threatened by the prospect of a sports streaming service developed by its broadcast partners — and they’re hoping all cable, satellite and streaming subscribers will be equally worried.

“Every consumer in America should be concerned about the intent behind this joint venture and its impact on fair market competition,” the Fubo spokesperson said. “This joint venture spotlights a concerning trend where an alliance with significant market share, reportedly controlling 60 to 85 percent of all sports content, could dictate market terms in a manner that may not serve the broader interests of consumers.”

Related: Cable TV group criticizes Fox-WBD-TNT Sports streaming service

Fubo’s business has already been affected by the news, with the company’s stock price plummeting 11 percent in pre-market trading hours after news reports of the venture first surfaced.

On Wednesday, Fubo’s stock price dropped nearly 23 percent, ending the day at $1.94 per share. It was the first time in nearly seven months that Fubo’s stock price closed below $2.

Fubo’s stock price was not the only one to suffer a loss on Wednesday: Shares of Fox Corporation’s Class A stock tumbled 6.8 percent after the company beat Wall Street expectations on revenue for its second fiscal quarter of 2024, but reported lower advertising revenue in its core television business compared to last year. Shares of WBD closed 3.2 percent lower on Wednesday, while Disney’s stock price was flat for the day.

On Wednesday, executives at Fox Corporation said they expected their forthcoming sports streaming service to launch in the second half of the year. The name of the service has not been revealed, nor has a price been announced, though people familiar with the development of the service said it was expected to be lower than the cost of YouTube TV, which starts at $73 per month and carries channels from all three broadcasters.

Fubo starts at $80 per month for a package that includes channels from Fox, Disney and other broadcast partners like Comcast’s NBC Universal and Paramount Global’s CBS, though most customers pay more because Fubo tacks on a regional sports fee in most areas. The sports fee adds an extra $11 to $14 per month on top of the advertised price.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).