Tuning In: FuboTV Sues Big Name Media Companies over sports-centered Joint Venture

By: Sydney Schwartz*                                                                 Posted: 3/12/2024

On February 20^th, FuboTV, a live sports-focused streaming platform, sued Disney, Fox, Hulu, and Warner Bros. after the streaming services announced a joint venture earlier this month.[1]  The lawsuit alleges antitrust violations, claiming the joint venture will produce “extreme suppression of competition in the U.S. sports-focused streaming market”.[2]  Fubo seeks to block the joint venture from being carried out, alleging that it constitutes an anticompetitive merger.[3]  Furthermore, the company seeks punitive damages for the streaming conglomerate’s parts in imposing vastly above-market licensing fees on Fubo to be able to stream certain channels and sporting events.[4]

Background on FuboTV

Founded in 2015, Fubo markets itself as the only sports-focus streaming service on the market as well as a cheaper alternative to cable TV.[5]  The company prides itself on offering full coverage of all major league sports networks, meaning subscribers have access to all live-streamed sporting events.[6]  As a streaming service, Fubo relies on content owners to provide them licensing agreements to stream channels and sporting events.[7]  In 2020, Fubo struck a deal with Disney to gain access to major ESPN channels including the SEC and ACC Network for their subscribers.[8]  Later that month however, the company chose not to renew their contract with Warner Bros. citing that they couldn’t reach a deal that kept subscription prices within Fubo’s target range.[9]  Seeing as Fubo is no stranger to business dealings with these media giants, it might come as a surprise that they have decided to bring a lawsuit against them.[10]  However, these companies have had their fair share of issues over the years, with Fubo CEO David Gandler claiming these media giants have continuously challenged the company over licensing agreements and other barriers to obtaining their content.[11]

The Joint Venture and Potential Antitrust Violations

On February 6, 2024, Fox, Warner Bros., and Disney announced the finalization of a joint venture between the media outlets.[12]  The sports-centered venture, which is set to rollout in the fall of this year, will provide consumers with access to all of these companies’ sports programming under one platform.[13]  The platform, which remains unnamed, will also allow consumers to bundle their subscriptions with Disney+, Hulu, and HBO Max for minimal additional costs.[14]  The price has not yet been released, but the rumors are that it will be around fifty-dollars a month, whereas Fubo charges eighty-dollars a month for its cheapest plan.[15]

Each company will own one-third of the joint venture in exchange for the licensing agreement to their sports content on a non-exclusive basis.[16]  The joining together of these media giants, who control the majority of live sports content, means they can drive up prices for licensing rights on competitor streaming services.[17]  Streaming services such as Fubo are at the mercy of content owners, like Disney and Warner Bros., to obtain licensing agreements for channels and major sporting events.[18]  Fubo CEO Gandler alleges that this joint venture will allow these companies to exclusively reserve the rights to distribute access to live sports to their subscribers while blocking new competitors from entering the market.[19]  This monopolistic power will allow the media conglomerates to charge above-market prices for licensing fees to smaller streaming services who don’t produce or own any of its content, such as Fubo.[20]  The creation of their own sports-based streaming service will only further the media giants’ motivations for not making their content accessible to Fubo and other similar services.[21] Since Fubo is at the will of these content owners, they will be forced to raise their subscription prices which could cause them to lose subscribers to the less expensive joint venture platform, eventually driving the business into the ground.[22]

The Justice Department has announced that it will investigate the newly announced joint venture over antitrust concerns.[23]  The agency will look to see whether this new platform will harm consumers and prevent competition from entering the sports-streaming market.[24]  The joint venture is estimated to take control of approximately fifty-five percent of the sports streaming market in the United States upon its release.[25]  A major point of investigation into whether there has been a breach of antitrust laws is looking to see whether the joint venture will discourage the media companies from bidding against each other for future sports rights, effectively halting competition within the industry.[26]

Conclusion

This wouldn’t be the first time that the DOJ has blocked media outlets from joining together.[27]  The agency blocked a joint venture between Showtime and the Movie Channel back in 1983 which sought to control around fifty percent of yearly movie releases.[28]  However, legal experts are divided over what the outcome of the DOJ investigation might hold.[29]  Regulators will look to see whether the joint venture is simply a way for these companies to raise prices and restrict output within the sports-streaming industry.[30]  They will also investigate into whether this joint venture will stifle competition amongst these media giants for bids over producing major sporting events.[31]  The formation of the joint venture itself might not be enough to prove antitrust law violations, but if Fubo can prove the parties to the venture are refusing to do business with them or are starting to charge exorbitantly high licensing fees, they could land a major win in court.[32]

* Staff Writer, Jeffrey S. Moorad Sports Law Journal, J.D. Candidate, May 2025, Villanova University Charles Widger School of Law

[1] See Bhanvi Satija & Dawn Chmielewksi, FuboTV Files Antitrust Lawsuit to Block Disney, Fox, Warner Sports Streaming Deal, Reuters (Feb. 20, 2024, 5:27 PM), https://www.reuters.com/business/media-telecom/fubotv-sues-block-espn-warner-fox-sports-streaming-deal-wsj-reports-2024-02-20/ (explaining that these major content owners and producers are pooling together their access to channels to create one huge streaming platform for only one subscription price).

[2] See Sara Salinas & Julia Boorstin, FuboTV Sues Disney, Fox, Warner Bros. Over Sports Joint Venture, CNBC (Feb. 20, 2024, 5:52 PM), https://www.cnbc.com/2024/02/20/fubotv-sues-disney-fox-warner-bros-over-sports-joint-venture.html (quoting Fubo’s concern over monopolistic powers this venture is likely to create and damage that will ensue for smaller services).  The lawsuit alleges a long history of discrimination against Fubo at the hands of these major companies including the use of channel bundling packages which requires Fubo to raise prices for subscription. See id. (explaining bundling packages occur when content companies require smaller services to add less popular channels to their subscription packages in order to acquire rights to more popular channels).

[3] See Joe Reedy, FuboTV Files Lawsuit Over ESPN, Fox, Hulu and Warner Bros. Discovery Sports-Streaming Venture, AP (Feb. 20, 2024). https://apnews.com/article/fubo-espn-fox-hulu-lawsuit-6d90f09b123c24693e74157263ec342e (noting Fubo’s ideal outcome from this lawsuit, which is to axe this venture before it comes to market in hopes of leaving sports streaming industry open to competition instead of allowing several large companies to swallow up majority of marketspace).

[4] See Salinas et al., supra note 2 (elaborating on what Fubo is seeking from suit, which includes monetary damages for overcharging licensing fees and projected loss of customers due to new platform causing some consumers to switch).

[5] See Fubo Vs the Competition, Fubo, https://www.fubo.tv/welcome/directory/compare (last visited Feb. 22, 2024) (setting up background of why FuboTV was created and targeted clientele).  The streaming service offers over 170 channels and allows for up to ten active streams at one time.  See id. (detailing scope of Fubo’s offerings to subscribers which includes multiple levels of packages to choose from).

[6] See id. (emphasizing Fubo’s business model is centralized around sports streaming of live events in all areas of athletics).

[7] See What Is a Subscription License Agreement?, Ironclad, https://ironcladapp.com/journal/contracts/subscription-license-agreement/ (last visited Feb. 22, 2024) (explaining how streaming services pay licensing agreement fees to content companies who own and produce channels in order to offer them on their platforms).

[8] See Steven Impey, FuboTV Strikes ESPN Carriage Deal with Disney, Sports Pro (June 26, 2020), https://www.sportspromedia.com/news/fubotv-espn-disney-sec-network-streaming-rights-carriage-deal/?zephr_sso_ott=Xan1SW (noting how once former business partners, Fubo and Disney now sit on opposite sides of courtroom as this lawsuit unfolds); see also Aric Jenkins, FuboTV’s Deal with Disney Makes It a Force in Sports Streaming, Fortune (June 24, 2020, 5:20 PM), https://fortune.com/2020/06/24/fubotv-disney-deal-sports-tv-streaming-channel/ (describing Fubo as entering big leagues in sports streaming industry following its Disney deal to acquire rights to certain ESPN and college networks, which greatly expanded its service and increased profit).

[9] See Jason Gurwin, FuboTV to Drop WarnerMedia-Owned Networks Like TNT, TBS, CNN, & Cartoon Network, The Streamable (June 30, 2020), https://thestreamable.com/news/fubotv-to-drop-warnermedia-owned-networks-like-tnt-tbs-cnn-cartoon-network (highlighting prior issues between Fubo and major providers regarding price negotiations and package bundling requirements that would greatly increase subscription prices to amounts above its competitors).

[10] See Fubo Sues The Walt Disney Company, FOX Corp., Warner Bros. Discovery and Affiliates for Antitrust Practices, Bus. Wire (Feb. 20, 2024, 4:05 PM), https://www.businesswire.com/news/home/20240220332523/en/ (noting Fubo’s extensive history of business dealings despite now suing these companies).

[11] See id. (explaining long history of contention over fair licensing fees and package bundles which leave Fubo’s subscription prices in these company’s hands who have no interest in keeping Fubo at competitive prices).

[12] See ESPN, Fox and Warner Bros. Discovery Forming Joint Venture to Launch Streaming Sports Service in the U.S., The Walt Disney Co. (Feb. 6, 2024), https://thewaltdisneycompany.com/espn-fox-warner-bros-discovery-streaming-sports-service/ (announcing their new business venture despite these major companies being longstanding competitors within entertainment industry).

[13] See id. (creating this platform to combine all major networks into one convenient app for sports lovers without having to choose between subscription packages or pay for multiple packages).  The service will provide access to major sporting events including the PGA Tour, the four tennis Grand Slams, and Formula 1 to name a few.  See id. (noting combination of major networks allows subscribers unparalleled access to sports viewing like no package has ever given before).

[14] See id. (showing major companies are throwing in access to their individual streaming services when subscribing to this new platform).  Hulu, which is owned by Disney and Max, which are owned by Warner Bros. are popular streaming services with a wide range of content and will be an added bonus to subscribing to this new service; see also Samantha Delouya, Disney Plans to Slash Costs by Another $2 billion as it Aims to Make Streaming Profitable, CNN (Nov. 8, 2023, 7:27 PM), https://www.cnn.com/2023/11/08/media/disney-earnings-report-q4/index.html (noting Disney’s major loss over its previous streaming service ventures).  Disney notably hasn’t made a profit on its streaming service Disney+, and is reported to have lost $10 billion since it was rolled out in 2019.  See id. (suggesting Disney’s current financial status might be motivating factor in its current venture).

[15] See Isabella Simonetti, FuboTV Sues to Block ESPN, Warner and Fox Sports-Streaming Service, Wall St. J. (Feb. 20, 2024, 5:13 PM), https://www.wsj.com/business/media/fubotv-sues-to-block-espn-warner-and-fox-sports-streaming-service-b117e173 (explaining that price and other details haven’t been released yet, but it can be expected to be in this ballpark which is much lower than what other cableless services charge); see also Which Plan is Best for You?, Fubo, https://www.fubo.tv/welcome (last visited Feb. 24 2024) (noting Fubo’s prices range from $59.99 per month to $99.99 per month).

[16] See ESPN, Fox and Warner Bros. Discovery Forming Joint Venture to Launch Streaming Sports Service in the U.S., supra note 12 (describing details of joint venture between media giants which includes one executive team that is completely separate from each individual company).  Additionally, the companies have been quick to draw attention to the fact that the licensing agreements are on a non-exclusive basis.  See id. (highlighting this fact as their defense to antitrust law violation claims since they are technically still able to strike deals with other services).

[17] See Salinas et al., supra note 2 (noting worries of monopolistic tendencies this venture might entail in terms of driving up licensing fees for smaller services while cutting their own subscription prices).

[18] See id. (explaining Fubo’s reliance on content owners to supply their service with channels and access to events).  Unlike Disney, Warner Bros., and Fox, which are content owners and producers, Fubo is solely a streaming service that doesn’t own its own content.  See id. (emphasizing difference between streaming services versus content companies when it comes to ability to stream certain content).

[19] See id. (“‘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.’”).

[20] See id. (explaining impact of higher fees means potentially running these smaller services out of business).

[21] See Simonetti, supra note 15 (highlighting one alternative to charging higher fees is simply refusing to negotiate for selling their licensing rights and cutting off use of their channels and content to other services).

[22] See id. (noting how Fubo relies on currently priced plans to gain and maintain customers who choose Fubo because of its affordability).  Raising their prices could see a drop in subscribers, especially since their marketing is based on being a cheaper alternative to cable.  See id. (explaining how increasing prices could eventually make Fubo more expensive than cable which would mean losing many customers to competing services).

[23] See Leah Nylen & Todd Shields, Disney-Fox-Warner Streaming Deal Faces DOJ Antitrust Review, Bloomberg (Feb. 15, 2024, 1:34 PM), https://www.bloomberg.com/news/articles/2024-02-15/disney-fox-warner-streaming-deal-faces-doj-antitrust-review (sharing that DOJ will begin investigating details surrounding pending venture to see if antitrust violations have occurred).

[24] See id. (detailing investigatory efforts by DOJ which include eliminating competition within industry both between companies involved in this venture and with smaller services).

[25] See id. (highlighting how this venture will take over majority of industry space which could flag investigators to potential monopolization which DOJ seeks to prevent).

[26] See id. (emphasizing importance of industry competition from antitrust law perspective).  This need for competition is especially important in today’s sports broadcasting world as these major channels bid against each other for exclusive licensing rights of major events.  See also Edward Sutelan, Why is NFL 'Thursday Night Football' Only on Amazon? How Streaming Giant Won Rights to Prime-Time Games for 11 Years, Sporting News (Sept. 15, 2024), https://www.sportingnews.com/us/nfl/news/amazon-nfl-thursday-night-football-streaming/vwrdbages1omqsfucyypt0b7 (explaining bidding process between services to control certain sporting events exclusively for their subscribers).

[27] See Lawrence J. White, Antitrust and Video Markets: The Merger of Showtime and the Movie Channel as a Case Study, Colum. Bus. Sch. (1984), Available at: https://business.columbia.edu/sites/default/files-efs/imce-uploads/CITI/Articles/Antitrust%20and%20Video%20Markets.pdf (bringing up past DOJ findings in entertainment industry joint ventures).

[28] See id. (noting previous merger in content industry was deemed as prohibiting competition that consumed majority of industry’s business).  After the DOJ threatened to sue the companies, they changed directions and decided to fully merge instead.  See id. (emphasizing DOJ’s reluctance to allow ventures that tie up majority of market space).

[29] See Isabella Simonetti, FuboTV Sues to Block ESPN, Warner and Fox Sports-Streaming Service, Wall St. J. (Feb. 20, 2024, 5:13 PM), https://www.wsj.com/business/media/fubotv-sues-to-block-espn-warner-and-fox-sports-streaming-service-b117e173 (noting legal experts are unsure of expected outcome at this point as antitrust violations can be high bar to prove, especially joint ventures which don’t have such clear signs of anti-competitive behavior as straight mergers).

[30] See Antitrust Guidelines for Collaborations Among Competitors, Fed. Trade Comm’n (Apr. 2000), https://www.ftc.gov/sites/default/files/documents/public_events/joint-venture-hearings-antitrust-guidelines-collaboration-among-competitors/ftcdojguidelines-2.pdf (explaining what regulators will be looking into to determine whether this venture constitutes monopolization of power).  There is speculation that these companies are simply entering into a joint venture to push out smaller competitors to allow for their individual businesses to be more profitable.  See also Simonetti, supra note 15 (noting concern of motives behind joint venture might be to squash smaller competitors instead of fostering competition in sports streaming).

[31] See Nylen et al., supra note 23 (worrying that these large companies will no longer competitively bid against each other for airing rights for major sporting events which would be key in showing anti-trust violations).

[32] See Simonetti, supra note 15 (explaining how Fubo could present strong arguments if they can show halt in business dealings by these major companies with smaller services).  If Fubo can prove these companies are now refusing to do business or making it extremely difficult to do business with these smaller streaming services, they could potentially show they are engaging in anti-competitive behavior.  See id. (noting success in antitrust suits comes from strong showing of monopolistic behavior).