FuboTV Sues to Block Disney, Warners and Fox Sports Streaming Platform – The Hollywood Reporter

The media giants teaming up on a new platform that will pool together sports streaming rights are facing an antitrust lawsuit from rival sports streamer Fubo, which alleges that it’s being forced to carry dozens of pricey, non-sports channels as a condition of licensing sports rights from the companies in an anticompetitive scheme to stifle competition.

The lawsuit filed in New York federal court on Tuesday under seal names The Walt Disney Co., Fox Corp. and Warner Bros. Discovery and seeks to block the joint venture.

The untitled streaming platform, announced on Feb. 6 and scheduled to launch this fall, will offer live linear channels like ESPN, Fox, ABC, TNT and TBS, as well as games and other sports rights from all three companies on a nonexclusive basis. It will be offered directly to consumers but also as a bundle with WBD’s Max, Disney’s ESPN+ and Hulu.

The suit accuses the media giants of leveraging their “iron grip on sports content to extract billions of dollars in supra-competitive profits,” leading to consumers paying more for highly popular sports content.

According to a release announcing the suit, other examples of behavior that may violate antitrust laws include the media companies charging Fubo content licensing rates that are as much as 50 percent higher than rates they charge other distributors.

“Defendants also impose non-market penetration requirements (the percentage of total subscribers to which a content package must be sold to or cannot exceed) on Fubo,” the company said in a statement. “These actions individually and collectively increase the costs Fubo must pass onto customers. Fubo believes it has incurred billions of dollars in damages as a result of the Defendants’ actions.”

In a statement, Fubo chief executive David Gandler said, “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. 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.”

The day after the announcement, Fubo saw its stock plummet more than 25 percent. It said in a statement issued at the time that “streaming sports ventures rarely work” and that the deal may violate antitrust laws.

It explained, “Every consumer in America should be concerned about the intent behind this joint venture and its impact on fair market competition. This joint venture spotlights a concerning trend where an alliance with significant market share, reportedly controlling 60-85% of all sports content, could dictate market terms in a manner that may not serve the broader interests of consumers.”

Fubo is represented by Joseph Hall of Kellogg, Hansen, Todd, Figel & Frederick. The firm has represented clients across telecommunications in dealings with the Federal Communications Commission, including AT&T and Verizon.

Fox, and WBD did not immediately respond to requests for comment. Disney and ESPN declined to comment.