Following the announcement of a joint television streaming venture between The Walt Disney Company, FOX Corporation, Warner Bros. Discovery and their associated affiliates, FuboTV Inc. has filed an antitrust lawsuit against the companies. The suit alleges that these entities have tried to block the sports streaming business in a campaign spanning several years, harming FuboTV and its consumers for several years. The lawsuit was filed on Tuesday in the U.S. District Court for the Southern District of New York and requests a jury trial and punitive damages, alleging that these companies have included expensive non-sports channels in bundles with coveted sports networks.
There are various other examples of antitrust behavior within the lawsuit, including upcharges on Fubo licensing content 30% to 50% higher than rates charged to other distributors. Additionally, the lawsuit stated that the companies have imposed non-market penetration requirements, causing FuboTV to confer more costs towards its customers. FuboTV asserts that it has suffered billions of dollars in damages because of these actions. These media conglomerates control 85% of the U.S. sports market, according to a report from Brian Steinberg of Variety cited in the press release.
The combined endeavor, which is currently slated to be released this fall, would contain ESPN, ESPN2, ESPNU, SEC Network, ACC Network, ESPNEWS, ABC, FOX, FS1, FS2, Big Ten Network, TNT, TBS, truTV and ESPN+. An announcement pertaining to pricing of the service has yet to be divulged, although various sources informed Puck sports correspondent John Ourand that it could fall between $40 and $50 per month.
“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 chief executive officer of Fubo, said in a statement.
“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.”
One of the outcomes Fubo is looking to attain in this lawsuit is to instruct or require the companies to be subjected to restrictions, which could include economic parity in licensing terms and the payment of damages. Consumers in the United States are continuing to cut the cord at higher rates as people stream more content utilizing vMVPDs or access linear and nonlinear channels through free ad-supported television services (FAST).
Nielsen Media Research recently revealed that streaming accounted for a share of 36% of total day television viewership among Persons 2+, while cable television held 27.9% and broadcast television at 24.2%. Corroborating research from Ampere Analysis finds that global pay television penetration will experience its first-ever yearly decline in 2024, forecasting that all regions will endure this reality by 2025. The research firm also stated that North America pay television penetration equated to 45% for 2023 while the average price of a pay television subscription is over $90 per month.
“Simply put, this sports cartel blocked our playbook for many years and now they are effectively stealing it for themselves,” Gandler said. “Silence is no longer an option. The fact that live sporting events dominated television viewership in 2023, with 97 of the top 100 broadcasts, highlights the critical importance of sports in entertainment and the necessity for its broad dissemination.”
FuboTV called it “encouraging” that the U.S. Department of Justice has the intent to look into the joint venture, something it claims underscores “the potential negative and widespread impact this alliance will have.” The company aspires to receive equal treatment as it relates to pricing to safeguard fair competition and benefit its customers. FuboTV plans currently span from $79.99 to $99.99 per month, with the top-tier plan including 266 channels including major national and regional sports networks along with events in 4K resolution.
MoffettNathanson data analyzed by The Wall Street Journal found that more than 42 million U.S. households have forsaken pay television plans altogether in the last decade. The 7% rate of decline is a haste rise from the 2% rate measured several years earlier. The Walt Disney Company revealed that ESPN generated $255 million of domestic operating income last quarter on $4.07 billion in revenue. Its own direct-to-consumer offering, currently referred to as “Project Flagship,” will be available in August 2025, according to Disney Chief Executive Officer Bob Iger. ESPN+, the company’s OTT streaming service, currently has 25.2 million subscribers, down 3% year-over-year.
Warner Bros. Discovery reported that its Max streaming service has approximately 95 million subscribers, although it is unknown how many of those subscribers will pay for the Bleacher Report-branded sports add-on. This tier will cost $9.99 after Feb. 29, marking the end of a free promotional period the company has run since last fall. FOX Sports does not offer a streaming service for its live sports, although users can access live games using services including FuboTV and Hulu.
A proposed launch date for the combined streaming service would coincide with the beginning of the final year of the National Basketball Association’s existing seven-year media rights deal with The Walt Disney Company and Warner Bros. Discovery. NFL Commissioner Roger Goodell and NBA Commissioner Adam Silver were both reportedly not aware of discussions nor an impending announcement revealing plans for the streaming service.
