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FuboTV is suing sports streaming company ESPN-Fox-WBD, citing antitrust violations

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 U.S. sports streaming market.”

The lawsuit, filed Tuesday in New York federal court and obtained by Yahoo Finance, specifically addresses 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 joint venture, claims the companies used their “iron grip” on commercially important sports content to extort billions of dollars from distributors and consumers.

The media giants, the lawsuit says, made profits by “bundling” sports with less desirable content, forcing Fubo to air “undesirable, expensive content” and preventing the company from offering the packages that the Customers actually wanted.

Shares of Fubo, which has more than 200 channels and 1.5 million North American subscribers, have fallen about 30% since the joint venture 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 lawsuit, Fubo said the combined service would result in a “complete gridlock” and would only increase incentives for subscribers not to provide necessary content to Fubo and other sports distribution partners.

Additionally, the sports streamer said it was charged royalties that were higher than the market rate. In a separate press release, the company said the media giants had charged Fubo prices that were “30 to 50% and more” higher compared to other distributors.

“Each of these companies has consistently engaged in anti-competitive practices designed to monopolize the market, stifle all forms of competition, create higher prices for subscribers and deprive consumers of the choice they deserve,” said David Gandler, co-founder and CEO of Fubo, in the press release.

The story goes on

“By combining to exclusively reserve the rights to distribute a dedicated live sports package, we believe these companies are creating insurmountable barriers that will effectively deter any new competitor from entering the market,” the executive continued.

“This strategy ensures that consumers who desire a dedicated sports channel offering have no choice but to subscribe to the defendants’ joint venture.”

BRAZIL - September 5, 2021: In this illustration, the FuboTV logo is seen on a smartphone.  (Photo illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

BRAZIL – September 5, 2021: In this illustration, the FuboTV logo is seen on a smartphone. (Photo illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) (SOPA images via Getty Images)

The unnamed platform will bring together the media giants' respective sports networks as well as certain direct-to-consumer (DTC) sports services and sports rights. This includes content from all major professional sports leagues and college sports.

The service will launch sometime this fall and no price is known.

“Simply put, this sports cartel has blocked our playbook for many years and now they are essentially stealing it from 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 antitrust laws.

The government aims to complete the review before opening the service 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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