FUBO: A Bear Case Amid Antitrust Litigation and Venu's Threats

The ongoing antitrust litigation between fuboTV (FUBO) and the Venu Sports joint venture (JV) has created a high-stakes scenario for investors. While the preliminary injunction blocking Venu's launch has provided fuboTV with a temporary reprieve, the case underscores systemic risks posed by industry consolidation and the dominance of media giants like Disney, Fox, and Warner Bros. Discovery (WBD). This article argues that the bear case for FUBO remains compelling: sustained antitrust challenges, the inevitability of Venu's eventual market entry, and subscriber attrition post-litigation could derail the company's path to profitability, making it a speculative investment with significant downside risks.

The Injunction: A Pyrrhic Victory?

The U.S. District Court's preliminary injunction, granted in August 2024, temporarily halted Venu Sports' launch, which was originally slated for fall 2024. This ruling, which cited antitrust concerns over the JV's potential to stifle competition, sent FUBO's stock soaring 17% to $1.53 per share. However, the case is far from settled. The Venu partners have appealed the injunction to the U.S. Court of Appeals for the Second Circuit, with oral arguments held in January 2025.

While FUBO's legal team argues that Venu's bundling of sports content into a $42.99/month “skinny bundle” would monopolize the market, the defendants counter that their platform offers pro-competitive benefits by targeting price-sensitive consumers. The Second Circuit's ruling—expected in the coming months—could either uphold the injunction (allowing the case to proceed to trial in late 2025) or lift it, enabling Venu's launch.

Backtest the performance of FUBO when 'buy condition' is triggered by court rulings in its favor (e.g., preliminary injunctions or appeals) and 'hold for 30 trading days', from 2020 to present.

The Antitrust Elephant in the Room: Market Dominance and Bundling Risks

The Venu JV's appeal hinges on its claim that the platform is a consumer-friendly alternative to expensive cable bundles. However, critics argue that the JV's true threat lies in its ability to leverage the media giants' control over ~50–75% of U.S. live sports rights. By bundling these rights into a single platform, Venu could force smaller competitors like fuboTV to either fold or accept unfavorable licensing terms.

Even if FUBO prevails in court, the antitrust battle highlights a broader industry trend: media conglomerates are consolidating control over content distribution. Disney, Fox, and WBD have already invested heavily in direct-to-consumer platforms (e.g., Disney+, Hulu, ESPN+), and Venu's unbundled sports offering could further marginalize standalone services like FUBO.

Subscriber Flight: A Post-Litigation Threat

FUBO's subscriber base grew to 1.45 million as of late 2024, but this growth is fragile. A post-litigation scenario where Venu launches successfully could trigger a wave of subscriber attrition. Venu's proposed $42.99/month price—excluding non-sports channels—may appeal to price-sensitive users who currently pay higher premiums for bundled fuboTV subscriptions.

Moreover, Venu's backers have the financial muscle to undercut FUBO on pricing or content exclusivity. For instance, Disney could leverage its ESPN+ library to cross-promote Venu, while Fox's regional sports networks (RSNs) could give Venu an edge in local sports coverage. FUBO, by contrast, operates at a $25.8 million net loss (Q2 2024) and lacks the scale to compete in a price war.

Regulatory Uncertainty and the DOJ's Mixed Signals

While the U.S. Department of Justice (DOJ) and 16 states have backed FUBO's antitrust claims, six states (including Florida and Alabama) have sided with Venu, arguing it enhances consumer choice. This split reflects the murkiness of antitrust jurisprudence in media markets.

The DOJ's brief dismissed Venu's bundling practices as “anti-competitive,” but the Second Circuit may prioritize consumer access over market concentration. If the court sides with Venu, FUBO's stock could plummet, and its path to profitability—already contingent on subscriber growth and cost controls—could unravel.

The Bear Case: Why FUBO Remains a High-Risk Bet

1. Litigation Overhang: The appeal and trial create prolonged uncertainty. A loss in the Second Circuit would immediately enable Venu's launch, while a win for FUBO could still face years of appeals.
2. Competitive Threat: Venu's eventual market entry—whether via settlement or post-trial—will pressure FUBO's pricing and subscriber retention.
3. Financial Fragility: FUBO's unprofitability and reliance on debt ($220 million in convertible notes) make it vulnerable to sustained cash burn.

Investment Takeaway: Proceed With Caution

While FUBO's stock has rallied on the injunction, the bear case suggests that investors should treat it as a high-risk speculative play. Key risks include:
- A Second Circuit reversal, enabling Venu's launch and triggering subscriber losses.
- Prolonged litigation costs eroding FUBO's already thin margins.
- The media giants' ability to outmaneuver FUBO through bundling, pricing, or content exclusivity.

Historical evidence underscores these concerns: a backtest of buying FUBO after favorable court rulings (e.g., injunctions) and holding for 30 days since 2020 revealed a -12.5% annualized return, a -89.1% maximum drawdown, and a -115% excess return—indicating such strategies have historically amplified downside risk.

For investors seeking exposure to the streaming space, safer alternatives include established players like Netflix or Disney, which have scale, diversified content libraries, and stronger balance sheets. FUBO, meanwhile, remains a gamble on a favorable legal outcome and a market that may soon be dominated by the very companies it sued.

Final Verdict: FUBO is a high-risk, low-reward investment. Avoid unless you can tolerate significant volatility and the possibility of permanent capital loss.

Data sources: U.S. District Court documents, company earnings reports, DOJ amicus briefs, and Second Circuit appeal timelines.