The first legal challenge to the ESPN-WBD-Fox joint venture is from streaming MVPD Fubo.
Fubo filed an antitrust suit against ESPN, Warner Bros. Discovery and Fox Sports Tuesday seeking to block those companies’ planned joint venture streaming service, which is set to launch later this year. In the lawsuit, which the company announced in a press release, Fubo accused the three of anti-competitive practices for bundling “dozens of expensive non-sports channels that Fubo’s customers do not want as a condition of licensing the Defendants’ sports channels,” thus preventing it from offering its own sports-centric skinny bundle. The Wall Street Journal previously reported details of the suit.
Indeed, the ESPN-WBD-Fox joint venture only includes channels that carry live sports, leaving out channels like Freeform and FX that Fox News that are included in the companies’ contracts with MVPDs like Fubo. The inclusion of such networks necessarily drives up costs for Fubo, which are passed down to consumers in the form of higher monthly bills — making it presumably easy for the ESPN-WBD-Fox venture to undercut those services with a lower price.
Fubo further alleges that it is being charged upwards of 50% more than other distributors for the companies’ content. Between the bundle, the cost and non-market penetration requirements, Fubo says that it has been forced to drive up prices and thus has suffered damages measured in the “billions.”
Per the WSJ, the suit also suggests that ESPN, WBD and Fox will be incentivized to pull their content from streaming MVPDs. The ESPN networks, TNT, TBS and truTV will all be available via two separate direct-to-subscriber services by the end of next year, if all goes according to plan.
For their part, the networks’ position has been that the joint venture will not reduce competition. Executives recently stressed that there will be no joint negotiations between the three, and while the topic of conversation was specifically sports rights, one imagines that applies to carriage deals as well.
The companies could also argue that the anti-competitive practices Fubo decries are simply standard, long-accepted practices.
They could also argue — presumably — that their service is not offering the kind of sports-centric skinny bundle Fubo describes thanks to the exclusion of both Paramount (CBS) and Comcast (NBC). Fubo, which does not have the WBD networks, will still have a greater collection of live sports, including the full suite of 2024 NFL games, than the joint venture.
At the same time, the exclusion of Paramount and Comcast was intentional on the part of the three partners. Including those outlets would have driven the price up to the level of the streaming MVPDs.
