‘Antitrust Laws Protect Competition, Not Competitors.’ Analysts Weigh in on Fubo’s Lawsuit to Block Sports Joint Venture
‘Antitrust Laws Protect Competition, Not Competitors.’ Analysts Weigh in on Fubo’s Lawsuit to Block Sports Joint Venture
According to market analysts and legal experts, Fubo may not have much of a leg to stand on in court.
From one perspective, Fubo’s lawsuit against the joint venture sports streaming service under construction by Disney, Fox, and Warner Bros. Discovery makes all the sense in the world. The live TV streaming service is fighting for its life, and it knows full well what a threat the forthcoming sports streamer would be to its customer base. However, according to some market analysts and legal experts, the suit may not have much of a chance once the arguments in court begin.
- Fubo’s suit alleges that the JV sports streamer constitutes a threat to customers through decreased competition and higher prices.
- The streamer also claims that Disney, Fox, and WBD blocked it from launching a similar service through bundling agreements, then stole its idea.
- Such agreements are common practice in the industry, however, and Fubo’s complaint may add up to nothing more than “sour grapes.”
Fubo first filed suit against the proposed streamer earlier this week, alleging that it would lead to a non-competitive environment, resulting in higher prices for consumers. The suit also states that Disney, Fox, and WBD stymied Fubo’s own efforts to launch a slimmed-down channel bundle with just sports offerings through bundling agreements with those companies that forced it to carry less popular channels if it wanted to distribute top sports networks.
“Simply put, this sports cartel blocked our playbook for many years, and now they are effectively stealing it for themselves,” Fubo CEO David Gandler said in a statement this week.
But market analysts and lawyers familiar with the sports entertainment industry think Fubo faces several hurdles in making its case to a judge that the new streamer is a violation of antitrust laws. Ad Week spoke to Kagan media research analyst Seth Shafer, who pointed out that bundling agreements like the ones Disney, Fox, and WBD enforced with Fubo are quite common in the pay-TV world.
“Winning its case could be an uphill challenge for Fubo as the basic process the company is objecting to—network owners leveraging the popularity of some of their top networks to gain carriage for less popular networks during carriage negotiations—is how the industry has operated for decades,” he said.
Sports attorney Chris Deubert spoke with Front Office Sports about the suit, saying that the fragmented nature of sports broadcasting rights will work against Fubo in its case. Because there are so many different services now offering the sports rights that will be available on the new streaming service, it will be hard for Fubo to make the case that the platform will create an anti-competitive environment.
“Antitrust law protects competition. It does not protect competitors,” Deubert explained. “Fubo’s complaints here are sour grapes, potentially, because they stand to lose out, theoretically, on market share. That doesn’t mean there’s an antitrust violation. If this was 10, 15, or 20 years ago, when the market for sports rights was much more consolidated, they’d have a stronger claim.”
As a sports-forward streaming service, Fubo clearly stands to lose more than most from the JV platform. It will include full livestreams of ABC, ESPN, Fox, FS1, TNT and more channels, offering every sports game that fans would find on those channels on TV.
If Fubo’s Lawsuit is on Shaky Ground, Is DOJ Probe Also Likely to Fizzle?
The Fubo antitrust suit is not the only challenge the JV streaming platform faces. The Department of Justice has announced it will review the proposed streaming service for antitrust violations as well, once the plans for the streamer are finalized.
If Fubo doesn’t stand much of a chance making these arguments in court, however, it seems unlikely that the DOJ will have legal standing to block the streamer. Perhaps the wider scope of the probe may change that; the Department will also investigate if the streamer causes undue harm to sports leagues, in addition to competitors and customers. The NFL is reportedly looking for contractual loopholes that will allow it to keep its games off the platform, and could seek to make its objections known to the DOJ as part of its investigation.
Some analysts have already spoken on their belief that regulators were unlikely to derail the JV streamer, and it’s starting to appear that their predictions will be confirmed. There’s still a long road to travel for the service as it fights off attempts to dismantle it before it hits the market, but many expert observers don’t see the lawsuit from Fubo as being able to stop the platform as a real threat to its existence.
Fubo
Fubo is a live TV streaming service offering a robust lineup of approximately 150 premier channels, with plans starting at $63.99 per month. This entry-level package provides access to local broadcast affiliates 18 of the leading 35 cable channels channels, and valuable regional sports networks (RSNs).