Fubo Image

It’s Game On! Fubo TV Takes Legal Action Against Media Titans

Isabelle Ortiz-LuisNews & Insights

By 2025, the number of US viewers who stream a sporting event at least once a month is projected to rise to over 90 million.[1] This trend is, at least in part, fueled by the strategic decisions of numerous teams and leagues that are now opting to distribute their games via over-the-air broadcasts or direct-to-consumer streaming platforms.[2]

Due to complicated broadcasting rights, the sports streaming landscape is incredibly fragmented and consumers must subscribe to multiple services if they wish to access a variety of games.[3] For instance, viewers need to subscribe to Amazon Prime Video for Thursday Night Football, Peacock for Sunday Night Football, and Paramount Plus or YouTube TV for the Super Bowl.[4] In response to this fragmentation, three major media conglomerates – Walt Disney Co., Fox Corp., and Warner Bros. Discovery – have revealed plans for a new sports-centric streaming service.[5] The collaborative effort aims to provide an all-encompassing solution for consumers seeking alternatives to traditional cable packages.[6] Ultimately, they seek to strike a balance between consumer demand, competitive pricing, and the challenges posed by escalating sports rights costs.[7]

While several details are still being ironed out, it is understood that each entity will have an equal one-third stake and representation on the board.[8] Moreover, it appears that all parties will contribute their sports content to the joint venture on non-exclusive licensing terms. [9] This partnership will combine an extensive array of broadcasts including the NFL, NBA, WNBA, MLB, NHL, NASCAR, College Sports, UFC, PGA TOUR Golf, Grand Slam Tennis, the FIFA World Cup, Cycling and others.[10] The upcoming application, yet to be named, will introduce a new brand identity to be managed independently by its own management team.[11]

However, on February 20, 2024, streaming service Fubo filed a $1 billion lawsuit in New York federal court in an attempt to block the joint venture.[12] Fubo alleges that the anticipated market dominance will stifle competition, consequently affecting consumer welfare and the streaming market as a whole.[13] Fubo claims that unjust bundling requirements have been “more draconian” for Fubo than other distributors in the marketplace and resulted in the company being subject to rates thirty to fifty percent above those of other distributors, which in turn may result in consumers being deprived of compelling and affordable streaming options.[14] Moreover, Fubo aims to halt the venture out of fear that the three companies may restrict their content from other platforms if kept exclusively within the joint venture, which could give rise to billions of dollars in damages.[15]

The increasing collaboration between various streaming providers and sports organizations unfolds as the industry adapts to the decline of the traditional regional sports network. Streamers have an opportunity to leverage live sports content as a unique selling point to attract and retain customers.[16] Furthermore, sports organizations seek to maximize the monetization of their rights, broaden access to their products, and target younger demographics.[17] 

However, the transition from traditional broadcast to streaming services is not going to be easy, and it is likely that traditional television channels will likely be the primary rights holders of big sports events for a long time. One reason for this is the length of contracts, which typically span anywhere from three to ten years, depending on the sport and geography.[18] As a result, streaming services might not get a chance to try to buy the rights and expand their share until the early 2030s for certain major leagues like the NFL.[19] Additionally, leagues may be hesitant to jeopardize a significant revenue source when current traditional broadcasts already offer high-quality viewing experiences, minimal delays, and robust production and distribution infrastructure.[20]

It is now up to the federal government to decide whether this joint venture threatens American consumers. Regardless, one thing remains clear: consumers have decisively “cut the cord” from expensive traditional cable television bundles and embraced the convenience of streaming bundles. As the future of sports streaming evolves, it will undoubtedly be shaped by the balance between accessibility, affordability, and competition within the industry.

[1] Streaming the game: How the rise of digital platforms is changing sports consumption, PwC.  https://www.pwc.com/us/en/industries/tmt/library/sports-streaming-platforms.html (last visited Mar. 15, 2024).

[2] Id.

[3] Id.

[4] Emma Roth, The ultimate sports streaming service will have to fight itself, The Verge (Feb. 12, 2024) https://www.theverge.com/2024/2/12/24070677/sports-streaming-service-espn-warner-bros-fox-app.

[5] Winston Cho, FuboTV Files $1B Lawsuit Seeking to Block Disney, Warners and Fox Sports Streaming Platform, The Hollywood Reporter (Feb. 20, 2024), https://www.hollywoodreporter.com/business/business-news/fubotv-files-lawsuit-disney-warner-fox-sports-streaming-platform-1235830781/.

[6] Id.

[7] Id.

[8] Bevin Fletcher, Disney’s ESPN, Fox, Warner Bros. Discovery team on JV for sports streaming service, StreamTV Insider (Feb. 6, 2024), https://www.streamtvinsider.com/video/disneys-espn-fox-warner-bros-discovery-team-jv-sports-streaming-service.

[9] Id.

[10] Olivia Coryell, ESPN, FOX and Warner Bros. Discovery Forming Joint Venture to Launch Streaming Sports Service in the U.S., ESPN Press Room (Feb. 6, 2024), https://espnpressroom.com/us/press-releases/2024/02/espn-fox-and-warner-bros-discovery-forming-joint-venture-to-launch-streaming-sports-service-in-the-u-s/.

[11] Fletcher, supra note 8.

[12] Cho, supra note 5.

[13]  Yahoo Finance, Fubo sues to stop Disney-Fox-Warner Bros. sports streaming plan, YAHOO! (Feb. 20, 2024), https://finance.yahoo.com/video/fubo-sues-stop-disney-fox-225903138.html.

[14] Fubo Sues The Walt Disney Company, FOX Corp., Warner Bros. Discovery and Affiliates for Antitrust Practices, Fubo (Feb. 20, 2024), https://ir.fubo.tv/news/news-details/2024/Fubo-Sues-The-Walt-Disney-Company-FOX-Corp.-Warner-Bros.-Discovery-and-Affiliates-for-Antitrust-Practices/default.aspx.

[15] Id.

[16] Supra note 1.

[17] Id.

[18] David Jarvis, et al, Live Sports: The Next Arena for the Streaming Wars, Deloitte (Nov. 30, 2022), https://www2.deloitte.com/xe/en/insights/industry/technology/technology-media-and-telecom-predictions/2023/live-sports-streaming-wars.html.

[19] Id.

[20] Id.