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FuboTV is a distinct underdog in the streaming wars, with fewer than 2mn US customers. For its base $80 a month plan, customers can stream hundreds of channels, yet most are interested in the handful of brand-name networks that show sports matches.
But on Friday, this little-known company pulled off an epic upset.
A New York federal district court issued an injunction keeping three industry heavyweights — Disney’s ESPN, Fox and Warner Bros Discovery — from launching a specialist sports-only streamer, only weeks before its intended debut. Fubo had argued in a lawsuit that the joint venture, called Venu, was anti-competitive and the judge has temporarily agreed.
For Fubo, there is little time to celebrate. Its annual revenue is under $2bn, its market capitalisation is down to $500mn and it is spending precious cash to buy back convertible bonds that come due in less than two years.
Disney, Fox and WBD had planned for Venu to cost just $43 a month at the outset. No doubt Fubo would love to slash its price in half to keep up. But the likes of Disney force Fubo to buy not just ESPN — whose wholesale cost to distributors can be as much as $9 a month — but other unpopular networks that require subsidy.
Fubo sued the trio under the theory that they created Venu to carry sports channels only, an “unbundled” arrangement not offered to Fubo. The judge agreed that this disparate treatment was enough to issue an injunction before a full trial.
Disney, Fox and WBD hate unbundling — the pay-TV package deal had underpinned their huge profits for decades. But cable and satellite “cord cutting” is now inexorable. Narrowly tailored products such as Venu — however suboptimal — are then their only hope to survive in a world where customers demand à la carte entertainment options.
Fubo went public in 2020. Like classic disrupters, it is unburdened by legacy business models. But, while innovative, its business is yet to prove sustainable as its also lacks the strong cash flows that still emanate from old-school media.
Disney, Fox and WBD may eventually be forced by the courts to sell ESPN and their other sports networks as standalone products to Fubo and others. But it is not obvious that the maths will work out for any of them.
sujeet.indap@ft.com
