• by Wayne Friedman , Staff Writer, February 22, 2024

In its lawsuit this week, Fubo TV had a lot to consider about anticompetitive behavior from big legacy TV-network centric media companies. 

But much of the sports-focused virtual pay TV distributors' issues occurred before Walt Disney, Fox Corp and Warner Bros. Discovery announced their efforts around a new joint venture sports streaming service two weeks ago -- now called “Spulu” by many, a sports riff on Disney’s streamer, Hulu.

So why wait if there were long-term issues? The complaint does not reveal much about timing.

The biggest issues for Fubo -- and other pay TV network distributors -- arise from so-called "block-booking" -- forcing a distributor to take scripted and unscripted entertainment content that “customers do not want or need,” according to the legal complaint.

Sports is another matter, of course.

In Fubo’s lawsuit, it said those three TV-network owned companies imposed above-market pricing “by colluding with Fubo's two largest competitors” — Google-owned YouTube TV and Disney-owned Hulu + Live TV (“Hulu TV”) — which ultimately resulted in setting artificially high rates for Fubo.

It added that ESPN-Fox-WBD offered “rebates” to Hulu +Lives and YouTube TV after that fact.

In addition, Fubo says the three companies prohibited Fubo from offering DVR and video-on-demand features for all content that consumers normally get from other programmers. 

Fubo says its lawsuit will lead to higher prices for all distributors and in turn for its consumers.

The irony here, it says, may come when those big TV-network-centric companies now talk about “unbundling” for this ‘Spulu’ new sports-streaming app -- that by pulling out just sports content for its own platform, consumers will spend less. 

In the lawsuit, the company quotes Walt Disney CEO Bob Iger, who says consumers will get just sports programming at a “more attractive price” than the big legacy pay TV bundle. Estimates are Spulu could cost around $40 a month say analysts versus $100 for bigger traditional pay TV bundles that include sports, news and entertainment programming.

Fubo is naturally upside down about this. Unbundling sports will have a major effect on its  sports-focused digitally delivered pay TV business, one that also offered regular non-sports entertainment programming.

The focus is now on the three companies' collective 15 cable TV networks, which will be included in the new service: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS, truTV, as well as ESPN+. Ultimately, those networks will still be offered to Fubo but at a much higher price level, it believes. These networks are a major piece of Fubo’s business.

Ask yourself what the NFL, NBA, NHL, Major League Baseball, Nascar and others think -- sports leagues/groups that give big value to those channels. One would think they would want their content to be available on as many platforms as possible. 

Is it enough for those leagues to get involved on this level? For FuboTV’s 1.5 million subscribers?

Know that the NFL wasn’t all that happy that the announcement of Spulu came without their knowledge. Not that they could do anything about it. Non-disclosure agreements were enforced..

What's Fubo's chance of succeeding?