I previously discussed Fubo's earnings and my thoughts on them. Now, I want to focus on the main reason for Fubo's recent sell-off.
The company is missing key channels that hinder its growth, specifically the Turner Sports package and Discovery.
It's important to note that Fubo dropped Discovery due to a lawsuit, but surprisingly, subscribers didn’t leave. This move allowed Fubo to make significant strides toward profitability, which was a smart decision.
However, ongoing disputes between major cable companies like DirecTV and Charter with big media firms have made it harder for Fubo to attract and retain new subscribers. Whenever these disputes are resolved, new Fubo subscribers often don't stick around because Fubo lacks Discovery and Turner channels.
While this may seem like a short-term setback, it may not matter in the long run for a couple of reasons. First, Turner is set to lose NBA rights to Amazon in 2025, meaning many NBA games will shift to NBC channels. Warner Bros is currently suing the NBA, but that lawsuit is unlikely to succeed.
More importantly, Fubo's CEO, David Gandler, quickly filed a lawsuit after the announcement of Venu. Fubo successfully sued the sports cartel and won a preliminary injunction, a major victory in a challenging case. This lawsuit is about fair pricing and damages. If Fubo wins, it could lead to profitability and provide the resources needed to compete with YouTube TV. The catch here is you need to wait until late 2025 to see the trial play out. Or we may get a settlement surprise, I wouldn't expect this until after the Election and at the very least early Feb 2025. The DOJ is also planning to help Fubo in their lawsuit.
Fubo's future hinges on the outcome of its settlement with Fox, Warner Bros, and Disney. A win could bring fair pricing and potentially billions in damages.
Fubo's survival is crucial, not just for the company but for the entire sports media landscape. Without it, we risk a YouTube TV monopoly and face the same challenges again.
Just hold on tight, there is a huge chance Fubo will make history, and teach the Sports Cartel a lesson they will never forget.