Why Fubo’s Lawsuit Against ‘Spulu’ Won’t Help It in the Long Term, Even If It Wins
Fubo is all in on efforts to bring down the JV streamer from Disney, Fox and Warner Bros. Discovery. But its existential problems are already much larger.
The gauntlet has been thrown down. Fubo is a sports-centric live TV streamer on a mission these days and that mission is to try to prevent the unnamed joint venture sports streaming service from Disney, Fox, and Warner Bros. Discovery from launching this fall. Fubo is convinced that if the streamer makes it to consumers, it will sap so many viewers from virtual multi-channel video programming distributors (vMVPDS), another term for live TV streamers, that they’ll eventually be forced out of the marketplace. To prevent that from happening, Fubo has filed a lawsuit alleging the platform violates antitrust laws, and its CEO David Gandler has not missed an opportunity to condemn the practices of the companies involved in the JV, colloquially nicknamed “Spulu.” Gander has referred to Disney, Fox, and WBD as a “cartel,” and says that Fubo is in a “duel to the death” in its legal fight against the JV. But Gandler is overlooking a larger point in his arguments, perhaps intentionally: as subscription video-on-demand (SVOD) services continue to add live sports options, the JV sports streamer is far from the biggest threat to Fubo’s long-term survival.
Key Details:
- From Prime Video to Netflix, more and more SVODs are making marquee live sports deals.
- Fubo has never climbed above the 2 million subscriber mark, and will have a hard time surpassing giants like YouTube TV.
- Fubo’s main advantage of offering regional sports networks becomes less valuable as that content becomes available in more places.
Fubo CEO David Gandler.
While the existential threat facing Fubo is challenging, the decline of cable is a much larger problem. However, they are suffering similar problems. Viewers have far more ways than ever before to access content at various price points and have grown accustomed to accessing video cheaply through SVOD services. Live TV streamers like Fubo have attempted to emulate some of on-demand streaming’s most successful attributes — such as flexible month-to-month contracts that allow viewers to cancel whenever they want — but so far the decline in cable subscribers has not led to a marked uptick in customers on vMVPD services. Fubo and Sling TV have hovered between 1.5 million and 2.5 million subscribers for years, and only YouTube TV has climbed above the 5 million customer mark among its competitors, as it sits at roughly 8 million.
That means that Fubo is a long way from the top in its industry, which already bodes ill for its long-term prospects of succeeding in a dying marketplace. But in the past few years, another and more dire threat to Fubo’s survival has arisen, one that uniquely affects Fubo because of its increased focus on offering sports: SVOD services adding live sports rights. Paramount+’s ability to stream live NFL games on Sunday afternoons helped the streamer gain a foothold when it launched as CBS All Access in 2016, but until Disney rolled out ESPN+ in 2018 and NBCUniversal launched Peacock in 2020, Fubo was still the undisputed leader in sports streaming. Even after these services launched, they offered a tiny fraction of the live sports available on cable channels carried by Fubo.
Recently, however, sports deals have been flying fast and furious for SVOD platforms. Prime Video has reportedly secured a package of national NBA rights starting in 2025, and also owns exclusive national rights to the NFL’s “Thursday Night Football.” Max now offers every sports game on TBS, TNT, and truTV in its Bleacher Report Sports Add-On. Disney+ will begin providing a selection of events from ESPN’s linear networks this year, ahead of a 2025 launch of an ESPN tile that will offer all live games and programming from the worldwide leader in sports. Even Netflix is getting in on the game, striking a deal with WWE to acquire global rights to stream live episodes of “Raw” starting in 2025. And this is just a handful of the sports deals made by SVODs in the past year.
Through SVOD services, sports fans will be able to access what the cable bundle never offered: the ability to pick and choose which services and channels they’ll pay for based on specific sporting events. It’s not exactly the a la carte dream scenario that many customers envisioned ten years ago when streaming was first taking hold, but it forecasts a grim future for live TV streaming services that are seeing the most popular content they offer become available at much lower prices than the minimum $75 per month that most vMVPDs charge.
There’s also a question of meeting fans where they are, which becomes increasingly important for sports leagues as they attempt to increase the revenue that they generate from their broadcasting mega-contracts. Streaming is an increasingly popular medium for watching sports, particularly among young people, and league executives know that these customers are critical to capture. That’s why the NBA specifically wanted to partner with a streaming service for a package of games in its next national deal, and why the NFL will offer a streaming-exclusive playoff game for the second year in a row in 2024-25.
Regional Sports to the Rescue?
One of the last advantages that live TV services can point to is their ability to distribute regional sports networks (RSNs) like Bally Sports channels, as well as operators like New York’s YES Network and SportsNet Pittsburgh. But that advantage erodes more and more every day, as these networks are increasingly offering in-market streaming platforms of their own that allow customers to avoid cable channel distributors while still watching their favorite teams.
Declining viewership and revenues for RSNs sent Bally Sports’ parent company Diamond Sports Group into bankruptcy proceedings that have stretched from March 2023 to the present, and its programming may become available more widely soon. The company is counting on an investment from Amazon when it exits bankruptcy, and the arrangement could allow for the Prime Video Channels platform to stream Bally Sports content. The company also owns a streaming platform in Bally Sports+ that distributes all of its NBA and NHL games in their local markets, as well as five MLB teams.
Simply put, all of the games that viewers could once only find on RSNs through cable, satellite, or live TV services are increasingly available elsewhere. There are fewer and fewer opportunities for Fubo to make the case that it is indispensable to viewers, particularly as every time it agrees to a deal to keep a desirable channel it has to raise prices for customers.
When Fubo launched in 2015, its goal was to deliver sports to viewers who wanted to cut out the fat of bloated cable plans that carried a bunch of channels that they never watched. Viewers still have that desire; the problem for Fubo is that it has become the overpriced, unwieldy service it once jeered. Consumers have more and more avenues to stream the live sports that Fubo has worked so hard to offer and more opportunities to watch sports via SVOD services at much cheaper prices.
Legal experts are already dubious of Fubo’s chances to succeed in court against Disney, Fox, and WBD’s JV. But even if it does convince regulators that the service constitutes an anti-trust violation, Pandora’s box has already been opened. SVOD services are unlikely to end their pursuit of further live sports rights, and leagues know that younger audiences are increasingly turning away from linear TV and in favor of SVODs. Those are the bigger problems facing streamers like Fubo these days, and that’s why the service is unlikely to survive long-term no matter the outcome of its fight against the forthcoming JV.
Fubo
Fubo is a live TV streaming service with about 90 top channels that start at $79.99 per month. This plan includes local channels, 19 of the top 35 cable channels, and regional sports networks (RSNs). In total, you should expect to pay about $94.99 per month, after adding in their RSN Fee. Fubo was previously known as “fuboTV.”