Key Takeaways:
– FuboTV sues Walt Disney, Fox, and Warner Bros. Discovery accusing them of anticompetitive behavior.
– The sports streaming platform alleges the media giants are attempting to monopolize the market by launching a massive joint streaming service.
– FuboTV calls for billions in damages, stating the companies’ actions created unnecessary costs for consumers.
Based on a report by New York Daily News (link to article here), sports streaming platform FuboTV has filed a legal action against Walt Disney, Fox, and Warner Bros. Discovery alleging anticompetitive conduct.
Unfair Competition Claim
FuboTV lodged the lawsuit in a New York federal court on Tuesday, following an announcement earlier this month by the media companies about a new joint sports venture. The proposed streaming platform aims to offer viewers access to content spanning all four major leagues and college sports on a singular, expansive platform.
FuboTV alleges in its court documents that “for decades, Defendants have leveraged their iron grip on sports content to extract billions of dollars in supra-competitive profits from distributors and consumers.” It also accuses them of boosting their revenue by ‘bundling’ their commercially valuable sports content with less attractive content, thereby compelling sports fans to buy channels they had no interest in.
Rising Content Licensing Rates
Further, the lawsuit claims the defendant companies carried out more anticompetitive practices by billing FuboTV for content licensing rates at costs up to 50% higher than what they charged other distributors.
The streaming platform is now calling for billions in damages, stating these inflated costs were ultimately deflected onto consumers.
More Defendants Named
In addition to Disney, Fox, and Warner Bros. Discovery, the lawsuit also names Disney-owned ESPN and Hulu as defendants. The impending joint offering plans to proffer channels such as ESPN, Fox, ABC, TNT, and TBS on a direct-to-consumer premise. Consequently, these channels are expected to be bundled with platforms including Max, Hulu, and ESPN+.
Stock Market Turbulence
Following the announcement of the joint initiative this month, FuboTV’s stock value plunged by an alarming 25%. At that time, the streaming service expressed its concern that the venture potentially violated antitrust laws.
‘Sports Cartel’ Accusations
FuboTV’s co-founder and CEO, David Gandler, labeled the media giants as a “sports cartel,” claiming that their consistent engagement in anticompetitive practices had stifled competition. He also accused them of unjustly monopolizing the market as well as creating heightened pricing for subscribers and depriving them of a much-desired choice for services.
In a statement released earlier this week, 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.”
Closing Remarks
At the time of writing, Walt Disney, Fox, and Warner Bros. Discovery have not yet commented on the lawsuit, and representatives for ESPN declined to comment. As this substantial suit unfolds, it beckons questions surrounding the future of sports broadcasting and whether streaming platforms will ultimately have a fair chance at competition in this rapidly evolving landscape of entertainment.