A game-changing sports streaming service teaming Disney, FOX and Warner Bros. together faces opposition from a new $1 billion antitrust lawsuit filed by rivals at FuboTV.
The lawsuit filed in federal court in New York on Tuesday alleges Fubo is being forced to carry numerous pricey, non-sports channels as a condition of licensing rights for sports networks from the companies that are now teaming up to launch a shared streaming service together. The antitrust lawsuit seeks to stop Disney, FOX and Warner Bros. from launching the service, which would bring channels from all the various companies — including ESPN, TNT, FOX, FS1, FS2 among others — under one umbrella for the new streaming platform that’s expected to launch in the fall.
In the lawsuit, FuboTV accuses the media companies of maintaining an “iron grip on sports content to extract billions of dollars in supra-competitive profits” and engaging in activities that may violate antitrust laws by charging Fubo content licensing rates that are up to 50 percent higher than what other distributors are asked to pay for the same content.
“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,” Fubo chief executive David Gandler said in a statement, first reported by The Hollywood Reporter. “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 new streaming service announced on Feb. 6 was a first-of-its-kind deal, teaming media companies to launch a sports-specific brand combining all of their networks under one banner that could be offered to consumers.
Disney already maintains numerous streaming services, including Disney+, Hulu and ESPN+, while Warner Bros. has the Max app. The new sports package also will be offered in a bundle package that can be included with an existing streaming service at an additional cost.
Right now, FOX doesn’t have its own streaming app, so the only way to access those channels is through cable or another major service like YouTube TV. That would all change with the network teaming up with Disney and Warner Bros.
Of course, all UFC programming is currently controlled by ESPN, so that would also be available through the new streaming service. The UFC’s deal with ESPN comes to an end in 2025, and negotiations on a new contract are expected to start later this year.
Many believe that Disney, FOX and Warner Bros. teaming up together on the new streaming service is an attempt to control the spiraling costs associated with sports rights deals. For instance, the NBA could seek a package that could double or triple their current deal, with costs potentially reaching $8 billion per year.
Meanwhile, the UFC broadcast rights are expected to possibly double what ESPN currently pays, approximately $300 million per year for a seven-year contract that expires in 2025.
Fubo seeks to stop that sports streaming service from ever launching. The company already saw stock prices drop more than 25 percent the day after the deal between Disney, FOX and Warner Bros. was first announced.
Fubo has dabbled in combat sports in the past, as well, with the streaming service currently broadcasting BKFC events and previously working with Bellator and the PFL on the Challengers Series, which will not be featured for the promotion in 2024.
