Sports streamer FuboTV (FUBO) filed an antitrust lawsuit against the media giants behind an upcoming "joint venture" sports streaming service, citing "the extreme suppression of competition in the US sports-focused streaming market."
The complaint, filed in New York federal court on Tuesday and obtained by Yahoo Finance, specifically calls out the joint venture's (JV) parent companies — Disney's ESPN (DIS), Warner Bros. Discovery (WBD) and Fox (FOXA).
Fubo, which is seeking to block the JV, alleges the companies have used their "iron grip" on commercially critical sports content to extract billions of dollars from distributors and consumers.
The media giants, the complaint claims, earned profits by "bundling" sports with less desirable content, forcing Fubo to broadcast "unwanted, expensive content" and preventing the company from offering the packages customers actually want.
Shares of Fubo, which boasts more than 200 channels and 1.5 million North American subscribers, have fallen about 30% since the JV was first announced on Feb. 6.
Disney's ESPN and WBD declined to comment on the lawsuit. Fox did not immediately respond to Yahoo Finance's request for comment.
In the suit, Fubo said the combined service would culminate in "a total freeze-out" and only increase the participants' incentives not to make the necessary content available to Fubo and other sports distributors.
Additionally, the sports streamer said it's been charged above-market licensing rates. In a separate press release, the company said the media giants have charged Fubo rates which are "30% to 50%-plus" higher compared to other distributors.
"Each of these companies has consistently engaged in anticompetitive practices that aim to monopolize the market, stifle any form of competition, create higher pricing for subscribers and cheat consumers from deserved choice," Fubo co-founder and CEO David Gandler said in the release.
"By joining together to exclusively reserve the rights to distribute a specialized live sports package, we believe these corporations are erecting insurmountable barriers that will effectively block any new competitors from entering the market," the executive continued.
"This strategy ensures that consumers desiring a dedicated sports channel lineup are left with no alternative but to subscribe to the defendants' joint venture."
The unnamed platform will bring together the media giants' respective slate of sports networks along with certain direct-to-consumer (DTC) sports services and sports rights. This will include content from all the major professional sports leagues and college sports.
The service will launch sometime this fall and does not have a known price point.
"Simply put, this sports cartel blocked our playbook for many years and now they are effectively stealing it for themselves," Gandler added. "Silence is no longer an option."
According to The Wall Street Journal, the Justice Department plans to investigate the JV to determine whether or not it would violate any antitrust laws.
The government is aiming to complete the review before the service becomes available to the public, the report added.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].
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