Disney, Fox, and Warner Joint Streaming Deal on the Line After FuboTV Lawsuit

FuboTV has filed a lawsuit against Walt Disney, Fox, Warner Bros. Discovery, and their affiliates over antitrust practices.

In the lawsuit, FuboTV claims that for years, the mentioned entertainment giants have engaged in a campaign preventing access to Fubo’s sports-focused streaming platform.

The antitrust lawsuit also mentions the recent partnership between Disney, Warner, and Fox to launch a joint sports streaming platform. It says that this venture would have an impact on Fubo’s business of appealing to sports fans.

Disney, Fox, and Warner Engaged In Anti-Competitive Practices

In the lawsuit, FuboTV has also claimed that the defendants adopted anti-competitive practices.

According to the company, while it was committed to offering consumers low-cost sports packages, the defendants were using their dominance in the sports industry to generate “supra-competitive profits.”

Today, Fubo is fighting back. We have filed a lawsuit against Walt Disney, FOX, Warner Bros. Discovery and their affiliates for their anti-competitive tactics. Even before their joint venture was announced, we believe these companies have had a clear agenda to eliminate… pic.twitter.com/vqeWmXSg7m

— Fubo (@fuboTV) February 20, 2024

According to Fubo, the media moguls were adopting practices that saw consumers paying more to access highly popular sports content. Doing that posed significant damages to Fubo and its customers according to the lawsuit.

Fubo also pinpoints several instances where the defendants have used anti-competitive practices. Among those are promoting unfair bundles that have led to Fubo offering expensive non-sports channels that do not appeal to customers.

It also accuses the defendants of high licensing rates, which, according to Fubo, are nearly 20% higher than what other distributors pay.

Fubo is also forced to comply with non-market penetration requirements determining the number of subscribers a content package is available to.

These anti-competitive actions have increased Fubo’s overall costs, which the company is forced to pass on to customers. In the lawsuit, the company notes that the practices have resulted in billions of dollars in damages.

Fubo Criticizes Disney, Warner, and Fox’s Joint Venture

Disney, Fox, and Warner Bros. Discovery are set to launch a sports streaming platform through a joint venture.

This platform will cater to young audiences. According to Fubo, the joint venture is a coordinated strategy to remove competition in the sports streaming industry.

The US Department of Justice (DoJ) has already expressed its interest in the deal. The DoJ will assess whether this joint venture will harm consumers, leagues, and competitors. The US regulator will scrutinize the terms of the deal once it is finalized.

Disney, Fox, Warner Bros’ sports streaming deal facing DOJ probe: report https://t.co/9npzXl0X6c pic.twitter.com/e9I8co4nCs

— New York Post (@nypost) February 15, 2024

According to Fubo, each of the three companies offers crucial sports content. They jointly control over half of the US sports rights market.

Therefore, by working together on a joint sports streaming platform, they will push away other distributors including Fubo. As such, the joint venture poses a competitive disadvantage.

Fubo’s co-founder and CEO, David Gandler, opined that the companies wanted to monopolize the sports market. They were creating high prices for subscribers, affecting the quality and the cost of subscriptions.

"I just don't understand why this should be the only industry in America that doesn't allow fair terms for all participants."

Fubo CEO David Gandler joined @JBoorstin to explain why Fubo filed a lawsuit against $WBD, $DIS & $FOXA regarding their sports streaming venture. pic.twitter.com/8Q5TQGNPLI

— Squawk on the Street (@SquawkStreet) February 21, 2024

Gandler said,

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.

Gandler also said that the defendants have often prevented new competitors from entering the market. However, over the years, Fubo had remained steadfast and continued to fight against being put out of business.

Nevertheless, the anti-competitive practices adopted by the defendants have affected Fubo’s growth trajectory.

Fubo is now looking for equal treatment in pricing and other factors. It is also seeking to join the joint venture or for the defendants to be subject to strict restrictions like economic parity in the licensing terms.

“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,” Fubo said.