Fubo has filed a civil lawsuit against Fox Corporation, the Walt Disney Company and Warner Bros Discovery (WBD) over the trio’s plans to launch and develop a sports-inclusive streaming service.
The lawsuit filed this week accuses the broadcasters of engaging in anticompetitive tactics by enforcing certain distribution terms on cable, satellite and cable-like streaming services while affording their forthcoming sports streaming service added flexibility.
Specifically, Fubo takes issue with Fox, WBD and Disney’s ESPN decision to develop and launch a streaming service that will only offer sports-inclusive broadcast and cable channels like Fox, ABC, Fox Sports 1, ESPN, TBS and TNT. As announced, the streaming service won’t include general entertainment and news channels like Disney, FX, CNN and Fox News, which sets it apart from other pay television platforms.
By contrast, Fubo says it and other pay television platforms have been forced to accept carriage terms that require them to distribute most channels owned by a broadcaster, even if their customers simply want live sports.
“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,” David Gandler, the CEO of Fubo, said in a statement on Tuesday. “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. This strategy ensures that consumers desiring a dedicated sports channel lineup are left with no alternative but to subscribe to the defendants’ joint venture.”
The lawsuit pits Fubo against some of its largest content partners, whose live sports rights are the cornerstone of the $75 per month streaming service. The company currently has distribution agreements in place with Fox and Disney to offer their live broadcast and cable channels, and previously carried WBD’s portfolio of Turner networks when the company was owned by AT&T. (The Turner channels were dropped in 2020.)
Document: Read the complaint filed by Fubo against Fox, Disney and WBD [PDF]
“We have previously collaborated with each of these companies so that we could offer must-have sports content to Fubo customers,” Gandler continued. “For many years, they have challenged our business at every opportunity through pernicious practices. While other new competitors were prevented from entering the market, Fubo has continuously fought back. The defendants’ unconscionable practices have impacted our ability to grow and have deprived consumers of a compelling and competitively-priced product.”
Gandler characterized the trio as a “sports cartel” that previously worked to “block our playbook for many years, and now they are effectively stealing it for themselves.” He noted live sports accounted for 97 of the top 100 television broadcasts last year, which “highlights the critical importance of sports in entertainment and the necessity for its broad dissemination.”
“Reports that the Department of Justice intends to look into the joint venture are encouraging, and it evidences the potential negative and widespread impact this alliance will have,” Gandler continued. “Fubo seeks equal treatment in terms of pricing and all relevant conditions from these media giants to ensure we can compete fairly for the benefit of consumers. Our customers deserve access to a competitively priced offering with innovative features designed by Fubo for an unparalleled sports viewing experience.”
Fubo’s lawsuit is seeking to prevent the three broadcasters from further developing their sports service or, in the alternative, to allow pay television companies to offer the same carriage terms for its channels that the sports joint venture will enjoy. If the court upholds the latter, Fubo is also seeking unspecified restitution for “substantial damages” caused by the broadcasters.
