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At the beginning of February, it was reported that Disney would be partnering up with Fox and Warner Bros Discovery to create a mega streaming service for sports, and FuboTV is now suing the three in attempts to either block the deal or get it amended.
A sports streaming service from three huge broadcast networks comprised of sports content from each of them is a pretty big deal. Provided it comes in at a reasonable monthly price point. And when you consider the amount of content that the service is expected to have, a reasonable monthly price would make this a very good service for huge sports fans. This could be a pretty good thing. Except, not everyone sees it that way. Especially FuboTV. On February 20 the streaming company announced it has filed a lawsuit against all three companies, citing antitrust practices.
The lawsuit claims that Disney, Fox, and Warner Bros. Discovery intentionally charged Fubo higher fees to license their sports content. The lawsuit states that Fubo was also required to pick up expensive bundles that “included non-sports channels.” All just so it would be allowed to license the sports content. These “anti-competitive practices” the lawsuit states, force customers to pay more for the sports they want to watch. In other words, Fubo is saying its customers didn’t want the non-sports content. But it was the only way to get the sports content offered. Causing “significant damages to both Fubo and its customers.”
FuboTV is suing Disney and others to block the deal or get better licensing terms
Taking on these three massive companies working together almost seems like a David and Goliath story. And that’s not just because the first name of FuboTV’s CEO is David. Disney is huge. Fox is huge. Warner Bros. Discovery is huge. These are multi-billion dollar companies and by comparison, FuboTV’s $585.61 million market cap makes it seem like a small fish. That’s not really an understatement either. FuboTV has to license the sports content from these networks. And that makes the trio of companies it’s suing a very formidable foe in the courtroom. A “Goliath,” if you will.
FuboTV CEO David Gandler isn’t deterred though, calling the three companies a “sports cartel” that has blocked its playbook for years and is now trying to steal it. So the lawsuit is FuboTV’s way of trying to get things on an even keel. While the lawsuit is seeking to block the deal from happening, there is an alternative outcome that FuboTV wants. Fair and equal treatment with regard to pricing. According to Gandler, Disney, Fox, and Warner Bros. Discovery charged FuboTV as much as between 30% and 50% more than other distributors of live sports content. It wants access to those lower rates.
FuboTV sees this as a particularly large issue as rumored pricing for the upcoming sports streaming service from the other three networks is likely to be around $50 a month, as reported by The Wall Street Journal (via The Verge). That would be a less expensive option than FuboTV for all of the same content that those three networks license out to Fubo. Which the company says would make it impossible for it and other distributors to compete.