The temporary halt of a sports streaming joint venture from The Walt Disney Company (NYSE:DIS), Warner Bros. Discovery (NASDAQ:WBD) and Fox Corporation (NASDAQ:FOX)(NASDAQ:FOXA) is a big win for FuboTv Inc (NYSE:FUBO), but the battle continues, an analyst said Monday.
The Fubo Analysts: The streaming company engaged in a battle and claimed an early victory, Needham analyst Laura Martin said.
"We estimate this injunction has a 75% chance of killing Venu, (good for FUBO), because: 1. It will now miss the NFL season; 2. Courts may believe that ‘big is bad' so no JV between these 3 large companies can get approved," Martin said.
The analyst, who has a Buy rating on Fubo with a $2 price target, said Warner Bros. Discovery losing the NBA rights after the 2024-2025 season makes the company the weaker partner and suggests Fox and Disney could try to team up as a duo.
"If they think they can get approval, despite their large size, NBC (with its 11-year NBA rights) would be a better partner than WBD," the analyst said of the Comcast Corporation (NASDAQ:CMCSA) owned media network.
Martin said Disney may also launch its ESPN DTC app in the second half of 2025 and abandon a skinny bundle sports joint venture.
"We see FUBO as an inexpensive way for public investors to participate in the US consumer shift toward OTT and Streaming TV."
Wedbush analyst Michael Pachter said the injunction shows the court will entertain the argument from Fubo laid out in the February lawsuit.
The analyst, who had a Buy rating on Fubo with a $5 price target in early August, said Venu is now tasked with proving their platform will not be anti-competitive.
"It's impossible to know how long the injunction will last, most likely a few months until Venu can make its case before the court," Pachter said. "This provides breathing room, to be sure, but it is far from a final decision."
The analyst said Fubo "is going to survive and thrive" if it can show subscribers want a sports bundle at a "competitive price."
"I think it's clear that consumer want a ‘skinny bundle' and that many millions of those will ultimately miss sports content, so Fubo is well positioned to attract them."
Pachter said the judge's ruling is a big if it is carried through, but only serves as a "temporary win if it does not."
Read Also: FuboTV To Bear The Brunt Of Higher Legal Costs Against ESPN – Analyst’s View
What Fubo Is Saying: Fubo CEO and co-founder David Gandler took to social media platform X to share his thoughts on the judge's ruling and praise investors and Fubo fans that are supporting the company.
"Today we saved the industry," Gandler tweeted.
Gandler called the judge's ruling "a monumental victory" for the company, for the media industry and for American consumers.
"My commitment to World Domination is unwavering. I've never stopped believing or working towards the vision."
Gandler called the ruling "a good days for the good guys indeed."
The Fubo CEO also highlighted the company's financial growth in a tweet.
"FUBO has consistently demonstrated its commitment to high-quality execution, delivering double-digit growth quarter after quarter, YoY, while also improving profitability KPIs, strengthening its balance sheet, & defeating a triumvirate of Goliaths in court. Where's the love?"
What's Next: Fubo said it plans to proceed with a broad lawsuit against the JV partners with accusations of anti-competitive behavior that hurts Fubo's sports-first streaming model.
The court has not announced a date for the next step in the battle of Fubo vs. Venu. The joint venture partners said they disagree with the judge's ruling and plan to appeal. A lengthy battle could be coming, but as mentioned by Martin above, the halt ahead of the key NCAA Football and NFL seasons could hurt the strength of the Venu platform.
FUBO Price Action: Fubo shares are up 31% to $2 on Monday versus a 52-week trading range of $1.10 to $3.82. Fubo stock is down 37% year-to-date in 2024.
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