Deadline: Game On! Disney, Warner Bros Discovery & Fox Pummeled By Fubo TV Antitrust Suit Over Proposed Sports Mega-Streamer

Story from Deadline:

The planned sports streamer team-up between Disney, Warner Bros Discovery and Fox may be stuck at the starting line if Fubo TV gets its way in court.

Looking at billions in damages, an antitrust lawsuit filed this morning by the nearly decade old live sports platform aims to stymie the trio’s big bundle move ASAP.

“For decades, Defendants have leveraged their iron grip on sports content to extract billions of dollars in supra-competitive profits from distributors and consumers,” the filing by Fubo TV Inc in federal court in New York states. “Defendants earned many of these profits by ‘bundling’ their commercially critical sports content with other, less desirable content—forcing sports fans to purchase channels they did not want.”

Fubo TV not only wants cash from its rivals current and potentially future, but they want to whole proposed sports streamer venture shut down by a court order. If they can’t get that, Fubo are seeking significant restrictions on the new streamer to keep ever escalating sports licensing prices within competitive reach.

“And once they have combined forces, Defendants’ incentive to exclude Fubo and other rivals will only increase. If not stopped, Defendants’ JV will substantially increase Defendants’ incentives—both individually and collectively—to deny access and/or charge higher content prices to third-party distributors that depend on access to Defendants’ must-have sports channels, irrevocably reducing competition in the market and harming consumers,” the partially redacted filing from the law firm of Kelloff Hansen Todd Figel & Frederick.

“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.”

On February 6, ESPN-owners and Hulu-co-owners Disney, Fox and Warner Bros. Discovery announced plans for a bundled service that would feature linear feeds spanning some 14 networks and a bit more than half of all sports rights in the U.S. Each company will own one-third of the joint venture, whose name, pricing and other details remain murky.

One thing we do know is that the all-powerful and well-watched NFL will not be a big part of the new streamer’s offering — if at all.

Because the new business is carrying linear feeds of the networks, which will also remain available via other means (including on Fubo), sources familiar with the enterprise have said they believe it is not vulnerable to regulatory antitrust scrutiny. The duplicative nature of the feeds also means that it could cost north of $50 a month given that “most-favored nations” clauses in contracts with pay-TV operators would prevent the new entity from offering deep discounts on premium sports fare

The DOJ has already said it will be putting on its antitrust googles to give the venture a closer look — and now Fubo have tackled the whole idea of what they see as a rigged match.

“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 CEO David Gandler declared in a statement released the same time the lawsuit was filed. “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. This strategy ensures that consumers desiring a dedicated sports channel lineup are left with no alternative but to subscribe to the Defendants’ joint venture.”

“Simply put, this sports cartel blocked our playbook for many years and now they are effectively stealing it for themselves.”

An ESPN representative said Disney is declining to comment on the antitrust suit. Fox and Warner Bros Discovery did not respond to request for response. If and when they do, this post will be updated. The Wall Street Journal first reported news of the Fubo TV lawsuit.

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