Fubo, which bills itself as a sports-first TV subscription streaming service, is suing Disney, Fox Corp. and Warner Bros. Discovery over the trio’s plans to launch a sports streaming bundle.
In a lawsuit filed Tuesday, New York-based Fubo alleges that Disney, Fox and WBD, together with Disney’s ESPN and Hulu, have “engaged in a years-long campaign to block Fubo’s innovative sports-first streaming business resulting in significant harm to both Fubo and consumers.” The complaint alleges that the forthcoming launch of their sports-streaming joint venture, pegged for the fall of 2024, “steals Fubo’s playbook” and violates antitrust law.
In its complaint, filed in the U.S. District Court for the Southern District of New York, Fubo seeks to block the joint venture or alternatively require restrictions on the defendants in order for the JV to proceed, such as “economic parity of licensing terms.” Fubo also said it seeks “substantial” monetary damages but its complaint did not specify an amount.
“Fubo believes it has incurred billions of dollars in damages as a result of the Defendants’ actions,” the streaming company said.
Reps for Disney and Warner Bros. Discovery declined to comment. Fox Corp. did not respond to requests for comment.
On Feb. 6, Disney/ESPN,Fox Corp.andWarner Bros. Discoveryannounced a joint venture that will create a unified streaming platform that includes ESPN+ and 14 linear TV networks: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNews, ABC, Fox, FS1, FS2, Big Ten Network, TNT, TBS and truTV. The companies said the streaming bundle will be available from the (as-yet unnamed) joint venture, and as an add-on via services like Disney+, Hulu and Max.
According to Fubo, “For decades, Defendants have leveraged their iron grip on sports content to extract billions of dollars in supra-competitive profits” by engaging in practices causing consumers to pay more for popular sports content and resulting in significant damages to both Fubo and its customers.
Fubo alleged that Disney, Fox and WBD have engaged in tactics to prevent Fubo from competing fairly in the marketplace, including through unfair “bundling” — by forcing Fubo to carry dozens of expensive non-sports channels that “Fubo’s customers do not want as a condition of licensing the Defendants’ sports channels.” Other examples of anticompetitive behavior cited in the complaint include the companies allegedly charging Fubo content licensing rates that are 50% or more higher than rates they charge other distributors. In addition, Fubo alleged, the companies impose non-market penetration requirements (the percentage of total subscribers to which a content package must be sold to or cannot exceed) on Fubo.
Additionally, Fubo claims the three companies have restricted Fubo from offering “compelling” streaming products that consumers would find desirable, despite similar products being offered by other traditional pay TV and streaming services, including Disney’s Hulu service.
The alleged anticompetitive practices of Disney, Fox and Warner Bros. Discovery “violate multiple provisions of the U.S. antitrust laws,” including Sections 1 of the Sherman Act and Section 7 of the Clayton Act, as well as New York’s Donnelly Act, according to Fubo’s lawsuit.
“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, co-founder and CEO of Fubo, said in a statement.
Gandler continued, “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.”
Separately, the Justice Department plans to review the Disney/Fox/WBD sports streaming joint venture over potential consumer harms, Bloomberg reported last week, citing anonymous sources.
