David Gandler, co-founder and CEO of sports TV streamer FuboTV, on Friday hit out at media giants pooling their own sports streaming rights to launch a rival streamer, speaking of “pernicious practices” after bringing a lawsuit against them.
“These results are especially impressive given the years-long challenges Fubo has faced as a result of what we believe have been anticompetitive practices by The Walt Disney Company, Fox Corp. and Warner Bros. Discovery,” Gandler said as he unveiled his company’s fourth-quarter financial results, where the sports streamer hit 1.61 million subscribers.
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“As evident in the antitrust lawsuit we filed against these parties last month, their proposed sports streaming joint venture is only the latest example of the pernicious practices they have inflicted to suppress our business and harm consumers. We are asking for an opportunity to compete fairly as a business, and to offer consumers a streaming option that gives them the channels they want, and at a fair price,” Gandler said in a statement ahead of a morning analyst call.
The lawsuit filed in New York federal court on Tuesday under seal names The Walt Disney Co., Fox Corp. and Warner Bros. Discovery and seeks to block the joint venture.
The untitled streaming platform, unveiled Feb. 6 and scheduled to launch this fall, will offer live linear channels like ESPN, Fox, ABC, TNT, and TBS, as well as games and other sports rights from all three companies on a nonexclusive basis. It will be offered directly to consumers but also as a bundle with WBD’s Max, Disney’s ESPN+, and Hulu.
Gandler during a morning analyst call didn’t hold back when responding to questions about the impact of the lawsuit and upcoming competition from the rival sports streamer. “I think that this is a duel to the death. It has been when we started this company. We are fighting for consumers. We are fighting for our customers. We are fighting for the tens of billions of dollars that are wasted annually by consumers paying for the same content multiple times. This is a very important process. We are sticking to our principles, to our guns, and we’re continuing to be able to chew gum and walk at the same time, as you can see from our numbers,” he told analysts.
Gandler added: “We assert that this JV is an attempt to monopolize the sports streaming industry and eliminate competition. Their proposed venture is, we believe, just the latest example of this sports cartel’s attempt to block and steal Fubo’s vision of what a sports streaming bundle should look like, resulting in billions of dollars in damages to our business. We consider the defendant’s pernicious contractual terms and other anti-competitive practices borderline racketeering.”
Gandler added FuboTV considered the lawsuit parties’ “pernicious contractual terms and other anti-competitive practices borderline racketeering,” as his company pays content rates — mostly on a per-subscriber basis — higher than they ought to be to deliver non-sports content to subscribers.
The FuboTV lawsuit claims the partners in the proposed rival sports streamer call for licensing rates 30 perent to 50 percent higher than other distributors like Hulu and YouTube as those streamers receive rebates that lower their content rates.
The FuboTV boss told analysts that a win in its lawsuit would mean an end to higher content rates charged by its major suppliers, which has forced the company to also license unwanted content. And a legal loss in the courts, or no intervention by anti-trust regulators in Washington, D.C., would, Gandler added, mean “we’ll have to continue to have to deal with unreasonable and above market economic terms and… continuing to fight the good fight.”
And FuboTV CFO John Janedis echoed that a potential lawsuit loss “doesn’t really change anything. If things remain status quo, we’d have to deal with unreasonable pricing and above-market terms, and I don’t believe that any of these companies would retaliate against us for filing what we believe is a credible complaint.”
Shares in FuboTV jumped by 33 cents, or 16 percent, to $2.40 in pre-market trading as investors reacted to the fourth quarter results and the company’s commentary over bringing a lawsuit against its biggest content suppliers.
During the latest quarter, FuboTV’s net loss during the latest quarter came to $71 million, down 26 percent from a net loss of $95.9 million in the same period of last year. The adjusted loss for the latest quarter was 24 cents per share, matching analyst expectations.
FuboTV’s global revenue rose 28 percent to $410.2 million, up from a year-earlier $319.3 million, with $401.8 million of that coming from North America. The sports and entertainment streamer hit 1.61 million subscribers in North America during the fourth quarter, up 12 percent year-on-year.
Subscription revenue came to $370.0 million, against a year-earlier $284.6 million, while advertising revenue edged up to $40.0 million, compared to $33.8 million last year.
