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Tuesday, April 16, 2024
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FuboTV Lawsuit Against Streaming Giants Likely Faces Uphill Climb

  • Legal and regulatory drama heightens around the high-profile streaming alliance.
  • Company claims that the defendants have ‘stolen’ its ‘core business idea.’
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There is still not a definitive agreement in place for the landmark sports-oriented streaming joint venture among ESPN, Fox, and Warner Bros. Discovery. (Otherwise known as “Spulu,” as some have started calling it.) But formal opposition is already mounting against the deal, heightening the drama for the venture between now and its projected market debut in the fall.

Streaming rival FuboTV has filed a federal lawsuit in the U.S. District Court for the Southern District of New York, seeking to block the venture on antitrust grounds. Even before the still-unnamed service becomes a full-fledged reality, FuboTV alleges the companies—along with other named defendants Walt Disney Co. and Hulu—have engaged in an extended pattern of “extreme suppression of competition in the U.S. sports-focused streaming market,” to the detriment of consumers through higher prices.

Furthermore, FuboTV said it has sought for years to offer a sports-only streaming service, but claims it has been thwarted by the media titans’ insistence on broader channel bundling requirements embedded within sports licensing agreements. 

“Faced with the threat of disruptive competition from Fubo and other upstarts, defendants have responded by locking arms (and locking others out) to steal Fubo’s core business idea—a sports-centric package of channels—while blocking Fubo from offering that same package,” the lawsuit reads in part. None of the defendants have responded yet to the action.

By referring extensively to prior business activities, FuboTV seeks to clear what will almost certainly stand as one of its biggest hurdles in the legal action: proving actual harm from a joint venture that doesn’t yet fully exist. The ESPN-WBD-Fox alliance currently stands in an “understanding on principal terms” and has not reached a definitive agreement.

Attorney: Sour Grapes

“Antitrust law protects competition. It does not protect competitors,” Chris Deubert, a veteran sports attorney with Constangy, Brooks, Smith and Prophete, tells Front Office Sports. “Fubo’s complaints here are sour grapes, potentially, because they stand to lose out, theoretically, on market share. That doesn’t mean there’s an antitrust violation. If this was 10, 15, or 20 years ago, when the market for sports rights was much more consolidated, they’d have a stronger claim.”

Pressure remains high on FuboTV, as the company’s stock has fallen 24% since the Feb. 6 unveiling of the new streaming venture. But scrutiny, too, is quickly surrounding the ESPN-WBD-Fox alliance, as the U.S. Justice Department reportedly is planning its own inquiry while several league commissioners including the NFL’s Roger Goodell and NBA’s Adam Silver, along with linear distributors, were either caught entirely off guard by the announcement, are irked by it, or both.

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