Last month, Disney announced that ESPN would be joining forces with FOX and Warner Brothers Discovery to create a new joint sports streaming service which would offer the companies’ portfolios of sports networks, certain direct-to-consumer (DTC) sports services – including content from all the major professional sports leagues and college sports.

This new sports streaming service is currently scheduled to launch in the fall of 2024 and will be made available directly to consumers via a new app. Subscribers will also have the ability to bundle the product, including with Disney+, Hulu and/or Max.

However, after the announcement, Fubo TV announced it would be taking the trio to court over the plans to launch a new streaming service, who have said that the vertically integrated media companies have engaged in a years-long campaign to block Fubo’s innovative sports-first streaming business, resulting in significant harm to both Fubo and consumers. The complaint alleges that the forthcoming launch of a sports-streaming joint venture steals Fubo’s playbook.

Today, Fubo TV held a quarterly financial investors event, and understandably, the launch of the new sports streaming platform has investors worried, especially with the lawsuit.  David Gandler, co-founder and CEO, Fubo, said in a statement:

“The results for the fourth quarter and full year 2023 demonstrate that Fubo continues to execute on our long-term strategy and that we are well positioned to capitalize on our aggregated and curated sports-centric entertainment offering, leveraging the evolving trends across the media and consumer landscape. These results are especially impressive given the years-long challenges Fubo has faced as a result of what we believe have been anticompetitive practices by The Walt Disney Company, FOX Corp. and Warner Bros. Discovery. As evident in the antitrust lawsuit we filed against these parties last month, their proposed sports streaming joint venture is only the latest example of the pernicious practices they have inflicted to suppress our business and harm consumers. We are asking for an opportunity to compete fairly as a business, and to offer consumers a streaming option that gives them the channels they want, and at a fair price. Going forward, despite these challenges, consumers should still expect a compelling sports-centric entertainment offering, and investors should expect Fubo to continue to execute well against our stated business objectives.

Edgar Bronfman Jr., executive chairman, Fubo also said:

“Fubo enters 2024 with good momentum and with meaningful improvements across just about every facet of our business, reaffirming our confidence in our 2025 positive cash flow goal.  We expect both top-line growth across revenue and subscribers as well as further leverage in our expenses. Fubo continues to execute on our long-term strategy to provide an aggregated and curated sports-centric entertainment offering to our customers. We believe that a sports-first live TV streaming experience should benefit all market participants, and we strive to be champions of the consumer on this front.”

During the investor call,   David Gandler was asked if the legal fight was “to the death”, or if Fubo might give in due to the legal costs involved in the lawsuit, to which he replied:

“This is a duel to the death. It has been when we started this company. We’re fighting for consumers. We’re fighting for our customers. We’re fighting for the tens of billions of dollars that are wasted annually on consumers paying for the same content multiple times. This is a very important process. We are sticking to our principles, to our guns. We are continuing to walk and chew gum at the same time, as you see in our numbers.” 

He added that this

“is just the latest example of the sports cartel’s attempt to block and steal Fubo’s vision of what a sports streaming bundle should look like, resulting in billions of dollars of damages to our business.”

 
 David Gandler has vowed to continue fighting for Fubo, but the new sports streaming service from Disney, Warner Brothers Discovery and Fox is going to be a major struggle.  This quarter, Fubo TV has 1.6 million subscribers and is generating $365 million-$375 million total revenue per year, which is up 17%.   The company is looking to make Fubo TV profitable by 2025, but if the new sports platform launches, it’s likely to lose subscribers, and the entire business could be at risk, which is why they, along with investors, are taking this so seriously.

Ultimately, sports programming is extremely valuable to the studios, who are spending billions a year on the rights to broadcast it, and Fubo is reliant on those companies selling on that content to them, to then sell on to their customers, but the entire cable/streaming television model has changed so much in the past decade, it’s hard to see how in the long term, Fubo TV will be able to compete with the studios going direct to the consumer, cutting out the middle companies like Fubo.

What do you think of the Fubo TV situation?  Let is know on social media!

Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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