Amanda Wang
On February 6, 2024, three of the biggest names in sports streaming—ESPN, FOX, and Warner Bros. Discovery—announced a “new joint venture to launch a sports streaming service in the fall[.]”[1] This new streaming service is set to include each of these companies’ preexisting portfolios of sports networks.[2] While some viewed this announcement as practically inconsequential for consumers, merely dubbing it a “sports skinny bundle,” one competitor was much more opinionated and outspoken.[3]
Just sixteen days following the announcement, Fubo filed an antitrust lawsuit against Disney, ESPN, Hulu, Fox, and Warner Bros. Discovery (“Defendants”) in the Southern District of New York.[4] In the complaint, Fubo accuses the Defendants of engaging in anti-competitive tactics in violation of U.S. antitrust laws that serve to “frustrate Fubo’s innovative sports-first streaming business, resulting in the extreme suppression of competition in the U.S. and significant harm to both Fubo and consumers.”[5] The most notable of these anti-competitive tactics is “bundling,” whereby the Defendants package their “most critical sports content with other, less desirable content” when licensing it out to third parties like Fubo.[6] According to the complaint, this has forced Fubo to spend hundreds of millions of dollars on bundles, despite trying repeatedly to “license sports content from the Defendants on an unbundled basis.”[7] The announced joint venture served as the tipping point, as it represents the first and only time that any of these Defendants have agreed to license the critical sports content on an unbundled basis.[8]
The primary relief sought by Fubo is a permanent injunction which would prohibit the joint venture altogether, as well as “future exclusionary conduct . . . tying arrangements, . . . and block-booking[.]”[9] While the outcome of this case is uncertain, a senior research analyst within the S&P Global Market Intelligence is pessimistic, stating that the process Fubo “is objecting to—network owners leveraging the popularity of some of their top networks to gain carriage for less popular networks during carriage negotiations—is how the industry has operated for decades.”[10] Whether the courts will adhere to industry norms in deciding this case or not, it seems that Fubo is not going down without a fight. On March 1, during Fubo’s quarterly earnings call, CEO David Gandler cited this forthcoming legal battle as a “duel to the death.”[11] As streaming services only continue to gain popularity amongst the public, this suit will help decide the fate and long-term viability of newer and smaller streaming services.
[1] Richard Deitsch et al., ESPN, Fox, Warner Bros. Discovery Launching Joint Sports Streaming Service in Fall of 2024, The Athletic (Feb. 6, 2024), https://theathletic.com/5255840/2024/02/06/espn-fox-warner-sports-streaming-service/ [https://perma.cc/48M2-H7FK] [https://web.archive.org/web/20240310012739/https://theathletic.com/5255840/2024/02/06/espn-fox-warner-sports-streaming-service/].
[2] The bundle will include “ESPN, ESPN2, ESPNU, SEC Network, ACC Network, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS, truTV and ESPN+.” Id.
[3] Andrew Marchand, New ESPN, Fox, WBD Streaming Venture Won’t Solve Much – At Least Not Yet, The Athletic (Feb. 7, 2024), https://theathletic.com/5256834/2024/02/07/espn-fox-warner-sports-streaming-service-marchand/ [https://perma.cc/7AKT-43N4] [https://web.archive.org/web/20240310013057/https://theathletic.com/5256834/2024/02/07/espn-fox-warner-sports-streaming-service-marchand/].
[4] Fubo was “[l]aunched in 2015 as a live sports streaming platform[.]” Ryan Waniata, Is Fubo Worth It? Here’s a Breakdown of Plans, Prices and Channels, SF Gate (Nov. 21, 2023), https://www.sfgate.com/shopping/article/fubo-tv-plans-cost-18171432.php [https://perma.cc/8YQP-CCY6] [https://web.archive.org/web/20240314214307/https://www.sfgate.com/shopping/article/fubo-tv-plans-cost-18171432.php].
[5] Complaint at 1, FuboTV v. The Walt Disney Co. (S.D.N.Y. Feb. 22, 2024) (No. 24-cv-01363).
[6] Id.
[7] Id. at 2.
[8] Id. at 5.
[9] Id. at 71.
[10] Stephen Lepitak, Fubo Faces ‘Uphill Challenge’ Suing Disney, Fox, and WBD Over Sports Streaming Plans, Adweek (Feb. 21, 2024), https://www.adweek.com/convergent-tv/fubotv-suing-disney-fox-wbd-sports-streaming/ [https://perma.cc/FTT9-WBZM] [https://web.archive.org/web/20240314214451/https://www.adweek.com/convergent-tv/fubotv-suing-disney-fox-wbd-sports-streaming/].
[11] Bevin Fletcher, Fubo CEO Cites ‘Duel To the Death’ in Battle Against Disney-Fox-WBD Sports JV, StreamTV Insider (Mar. 4, 2024), https://www.streamtvinsider.com/video/fubo-ceo-cites-duel-death-battle-against-disney-fox-wbd-sports-jv [https://perma.cc/R3LQ-YD4D] [https://web.archive.org/web/20240315011846/https://www.streamtvinsider.com/video/fubo-ceo-cites-duel-death-battle-against-disney-fox-wbd-sports-jv].