Fubo calls proposed streaming service 'sports cartel'

Fubo is taking the first legal crack at the proposed streaming service that targets sports fans.

Since 2015, the New York-based company has been offering slimmed-down bundles of TV channels that carry live sports programming —essentially the business plan of the still-to-be-named joint venture from Warner Bros. Discover, Fox Corp. and the Walt Disney Co.

Fubo filed a suit Tuesday in U.S. District Court in New York against the three partners, accusing them of conducting a “multifaceted campaign to frustrate” its business while moving ahead with their own version of it.

“Simply put, this sports cartel blocked our playbook for many years and now they are effectively stealing it for themselves,” David
Gandler, co-founder and chief executive of Fubo, said in a statement.

The three media conglomerates will have equal ownership shares in the new service announced Feb. 6.

The platform will offer the suite of ESPN channels, ABC, Fox and its cable sports channels, and WBD’s TNT, truTV and TBS, giving consumers who want access to live sports without a traditional pay TV subscription. The channels provide about half of the NFL schedule plus coverage of the NBA, Major League Baseball, the NHL and the NCAA men’s basketball tournament.

Fubo’s lawsuit asserts that its streaming service has been forced by the joint venture partners to take additional non-sports channels in order to get the carriage rights to ESPN, TNT, Fox Sports and other networks that carry live games, a tactic that the companies have long used in their negotiations with all pay TV providers.

Fubo, which has around 1.5 million subscribers, also said it has been forced to pay above market prices to carry the channels through a “web” of most-favored nation clauses with competing pay TV services. The suit said Fubo is paying carriage fees that are 30% to 50% higher than its competitors.

The suit also attacks the planned streaming service on the grounds it will “combine rights to most commercially critical sports content in a single entity, which will only increase the incentives not to make the necessary content available to Fubo and others.”

In its complaint, Fubo seeks to stop the joint venture or impose restrictions on the parties in order to proceed, such as “economic parity” in deals made with other services to carry the channels.

Representatives for Disney, Warner Bros. Discovery and Fox had no comment on the lawsuit.

The joint venture is scheduled to launch in August, in time for the NFL preseason.

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