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You might have missed it, but the world of sports TV changed forever this month.
On Jan. 6, Disney announced that it was combining its Hulu With Live TV service with the independent live-sports streamer FuboTV. In turn, Fubo asked the court system to drop its antitrust lawsuit against Venu Sports, the planned megaproject from Disney, Fox, and Warner Bros. Discovery that would have pooled all three broadcasters’ sporting licenses into one sports-focused streaming service. In turn, Disney will buy a 70 percent stake in Fubo, whose multichannel platform will gradually absorb the Disney-owned Hulu With Live TV service over the next year. Despite having lodged a potent case against Disney—one that persuaded a federal judge to block Venu Sports’ launch and eventually bring the suit to trial—Fubo is celebrating a sweetheart deal with its former courtroom enemy.
Even though Disney now has the power to appoint a majority of its board members, Fubo will retain a fair bit of independence, along with preferential treatment from Bob Iger and friends. Fubo will continue to operate as a publicly traded company with the power to negotiate its own carriage deals on behalf of the overall Fubo/Hulu With Live TV beast. (I’m just gonna call it “Fulu” for the rest of this piece.) Disney, meanwhile, will pay Fubo a hefty settlement and sign a distribution agreement allowing the entertainment juggernaut to offer a new ESPN-Fubo-ABC-ESPN+ bundled service to willing customers. It’s also killing Venu Sports for good, while pushing forward with already-extant plans to launch a $42.99-a-month stand-alone ESPN streaming service by the time football season kicks off again in the fall. This “ESPN Flagship” will not require a cable subscription, but it will entail an end to ESPN+, whose more limited selections shall be folded in. (Sadly for car-racing fans, it appears that the IndyCar franchise, which would have had a home on Venu, will need to find another streaming partner.)
This isn’t really a case of “if you can’t beat ’em, join ’em.” This is more like “even if you could have beaten ’em, just join ’em and see what you can get.” Veteran TV journalist Rick Ellis points out in his newsletter that Fubo could well have won its case—but, lacking a substantial market position or cash reserves, and facing the prospect of a yearslong litigation process, it perhaps found the most convenient solution to be the most advantageous one. Disney, despite losing gobs of money on its now-axed Venu plans and its settlement with Fubo, also gets a happy ending. As the investment analyst Laurent Yoon noted in a report, Hulu With Live TV is not the best revenue generator within Disney’s vast streaming portfolio (which includes Disney+ and Hulu on demand), so offloading that service to a smaller company means Disney can make its overall streaming business look a lot rosier to investors than it actually is.
While Venu is dead, its spirit certainly isn’t, having been reincarnated in this unholy Fubo/Hulu With Live TV marriage. As Front Office Sports reports, Disney’s two partners in the Venu effort—Fox and Warner—have respective individual deals with Fubo and with Hulu With Live TV. Which means that both of them will be able to license their sporting properties to Fulu™.
Understandably, then, those who were hoping Fubo would prevail wholesale over Disney are displeased with this compromise. Remember when DirecTV and Disney had that public brawl last year over their terms of agreement, leading to a brief period where no DirecTV subscribers could view any sporting events to which Disney owned the rights? Well, even though DirecTV resolved that battle on decent terms for itself, it’s certainly unhappy that Disney has now managed to consolidate even more sports under its already-vast umbrella, which just gives it an upper hand in future negotiations—along with a further incentive for sports-favoring DirecTV subscribers to unplug. DirecTV, alongside its rival satellite-TV provider EchoStar, has even challenged the dismissal of the Fubo-Disney lawsuit in court, claiming (reasonably!) that the antitrust concerns originally raised by the plaintiff have not been resolved. The satcasters are getting some backup from a separate federal lawsuit that an aggrieved Fubo subscriber filed this Tuesday, claiming that Disney’s position of power will allow it to “force independent streaming services such as Fubo to charge higher prices to their customers than they would in a free market.” (Again, not unreasonable, considering that Fubo’s cheapest plan comes out to $32.99 a month, while Venu’s proposed charge would have cost at least $10 more per month.)
Those legal efforts may not be such a long shot. Disney is also facing a federal antitrust lawsuit from 5 million YouTube TV subscribers, who collectively claim that the media giant’s ownership of both ESPN and Hulu allow it to artificially overload package offerings and thus overcharge distributors during negotiations. (Notably, the combined subscriber counts in the “Fulu” merger add up to 6.2 million—not too far below YouTube TV’s 8 million total subscribers, who begrudgingly pay $82.99 a month for the Google-owned streamer.
Meanwhile, DirecTV decided to play hardball this Tuesday by launching a $69.99-a-month “MySports” streaming bundle, which would bring together “more than 40 sports and broadcast channels” to customers in at least 24 U.S. cities for now, per Front Office Sports.
What does this all mean for you, sporting enthusiast? Well, to put it bluntly, if you’re someone who loves that Disney’s ownership of ESPN has already made it the ultimate gatekeeper for all your favorite teams—congrats! Now its majority stake in Fubo will usher even more sports under the Disney umbrella and likely incentivize the company to charge you for a whole lot of stuff you don’t want automatically included in streaming bundles. (Hey, that sounds a lot like the old cable-TV model, doesn’t it?)
If you hate Disney’s monopolization, bad news—all remaining competitors, in order to retain some kind of suitable sports-market competition with Disney, will themselves have to keep gobbling up everything they can, as DirecTV is attempting right now with the “MySports” thing. (It’s not for nothing that DirecTV tried, and failed, to acquire EchoStar for itself last year.) I mean, how do you think YouTube TV is going to respond to Fulu’s blatant attempt to encroach on its territory and compete for subscribers? You guessed it: by trying to acquire more valuable assets for itself and, thus, make everything far more expensive in the process. And for anybody who likes that an indie streamer like FuboTV was able to exist and do OK, if not great, for itself, even as corporate giants kept consolidating everything around them? You might as well consider it the last of a dying breed.
Fubo put up a valiant attempt to take on Venu, which would have collectively owned “over half the country’s TV rights to professional and college sports,” per the Hollywood Reporter. But it determined that the best way to fend for itself in the longer run was to become part of the very principle it was fighting against.
It’s a fitting saga to mark the impending transition from the antitrust-focused Biden administration to the corporate-captured Trump 2.0 era—and an alarming signal as to how the world of streaming will be transformed as a consolidation-friendly regime continues to leave cable TV behind, even as the new players ape the worst aspects of the old business model.
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