• by Karlene Lukovitz  @KLmarketdaily, January 2, 2020

FuboTV dropped the 22 Fox Sports Regional Sports Networks (RSNs), as well as FX, FXX, FXM and National Geographic, as of Jan. 1.

The virtual MVPD cited rising licensing costs under the properties’ new owners.

Sinclair Broadcast Group bought the RSNs from Fox last May. Disney acquired the FX and Nat Geo networks as part of its acquisition of 21st Century Fox last March.

In a statement about its decision to drop the Fox RSNs, published by Cord Cutters News, Fubo said the networks’ stand-alone rates are now “not consistent” with Fubo’s “mission to provide value and keep costs low to consumers.”

The streaming service added: “Despite these changes, fuboTV continues to be a sports-focused cable TV replacement with home team coverage in top markets,” with RSN carriage that includes “full coverage in Chicago, Philadelphia, the San Francisco Bay area and Boston [and] significant coverage in New York… we are the only vMVPD with home team coverage in Houston. Additionally, our base package features more than 40 channels that carry sports and over 700 local broadcast stations. We’re also the only vMVPD streaming live sports, including Super Bowl LIV, in 4K. fuboTV remains the best live TV streaming service to follow your home team throughout the season.”

Fubo still carries Fox-owned FS1 and FS2 and other Fox partner networks, which means that its customers will not miss NFL playoff games or the Super Bowl.

Fubo offers 100-plus channels for $55 per month. At $60, its family plan includes the same number of channels, but adds use of  a third simultaneous screen and a cloud DVR upgrade from 30 to 500 hours of space, at a 15% savings. 

In a statement issued to CCN, the Fox RSN group said that it is “disappointed” in Fubo’s dropping its RSNs, and broadened its attack to include non Sinclair-owned assets.

“Fubo positions itself as a sports-first service, yet it has chosen not to carry our RSNs, ESPN or ABC,” said the statement. “In addition, Fubo has dropped Fox-affiliated television stations in nearly 40 markets, FX and National Geographic Channel. We offered FuboTV terms consistent with those agreed to by the many other providers that carry our RSNs – including other OTT providers such as YouTube TV, Hulu + Live TV and AT&T TV Now. FuboTV customers should switch providers today to watch their favorite teams’ games and many other popular sports and entertainment programs.”

In a recent Reddit post cited by CCN, a Fubo staff member reiterated the service’s position on ESPN and Disney.

Fubo would “love to add ESPN to the bundle, and we have had many discussions with Disney over the years,” says the post. "In fact, Disney is a fuboTV investor (through its acquisition of 21st Century Fox assets) and sits on our board. However, as many of you know, neither FuboTV nor any other distributor is able to license 'just ESPN' from Disney, instead, distributors are required to license the 'Disney bundle.' There is no way around this." The difficult decision was required in order to build "a channel lineup that is both differentiated and affordable to consumers," the post adds.

Citing SNL Kagan’s estimate that the Disney bundle costs more than $16 per subscriber, and the bundle’s “high penetration requirements,” Fubo asserts that these factors would force it to revisit its own bundle pricing, and limit its ability to "offer a differentiated offer for different consumer cohorts."

Disney Media Networks offered this response to Digital News Daily:  “After months of negotiations, FuboTV has refused to reach a fair, market-based deal. FuboTV customers are now forced to pay full price for their TV bill without the FX and National Geographic networks. Consumers have more choices than ever and can instantly switch to Hulu or can access our programming on every major cable, satellite and telco service and many streaming video services in the market.”

Fubo added that, knowing that ESPN is important to many consumers, it is not dismissing the possibility of carrying Disney/ESPN in the future, if cost considerations allow. 

Still, “If sports fans can’t watch live sports broadcasts on ESPN and now many can’t see their local sports teams, why does an average sports fan pay $60 a month when they don’t seem to get what they want?,” observed The Media Channel. 

Fubo is grappling with a dilemma: How to offer the most comprehensive sports access possible without pricing itself out of business. 

The industry will be watching the outcome of this struggle, given its potentially broader implications for the business.