Loss of ABC Content Could Cost Fubo $57M, Says Suit, Seeking Injunction
“Tens of thousands” of FuboTV subscribers in 23 Nexstar markets were under threat to “suddenly lose access to ABC content” Saturday for two months, said a Fubo breach of contract complaint (docket 654978/2023) Wednesday in New York State Supreme Court in Manhattan. Fubo seeks a permanent injunction enjoining Nexstar and Tribune Media, which it bought in 2019, “from restricting access by Fubo subscribers to ABC content from affiliate stations.”
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Fubo and ABC renewed a proxy/retransmission agreement several months ago, and under ABC’s opt-in agreement, Nexstar’s affiliate stations were required to opt in no later than Friday, it said. But Nexstar notified Fubo Sept. 29 it wasn’t going to opt in to the ABC-Fubo proxy/retransmission agreement, “notwithstanding its obligation to do so” under a proxy commitment in a 2020 NewsNation agreement, which ends Nov. 30, Fubo said.
In December 2020, Tribune Media,signed a contract with FuboTV under which the virtual MVPD agreed to launch and carry Nexstar’s WGN America news programming channel, rebranded later as NewsNation. Under the NewsNation agreement, Fubo would pay Nexstar a licensing fee based on certain rates per subscriber. In return, Nexstar “explicitly agreed” it would opt into Fubo’s CBS, NBC, ABC and Fox proxy/retransmission agreements that arose for renewal during the term of the NewsNation agreement, so Fubo would obtain network content from Nexstar’s affiliate stations, the complaint said. Section 7 of the agreement said Nexstar would also opt into Fubo’s then-current CBS and ABC opt-in agreements.
During the term of the NewsNation agreement, Nexstar opted into Fubo’s proxy/retransmission agreement with ABC in 2020, subsequent agreements with NBC in June 2021 and with Fox in December 2021, said the complaint. Those previously opted-in network agreements extend three to four years. But a dispute arose in the CBS proxy/transmission agreement early this year about Nexstar’s obligation to opt in. “Nexstar refused to opt-in to Fubo’s proxy/retransmission agreement with CBS -- despite its obligation to do so under the NewsNation Agreement -- and threatened to cut off the feed from its CBS affiliate stations and cause a black-out with regard to CBS content on Fubo," it said.
After the CBS network promised, if necessary, to provide Fubo customers with the national CBS feed to take the place of the feed from Nexstar’s affiliate stations, Nexstar opted in to the CBS-Fubo agreement for a two-year term at the end of March. But unlike in that agreement, when Nexstar refused to opt in to the CBS-Fubo proxy/retransmission until CBS promised to supply its national feed, ABC is “contractually prohibited" from providing Fubo subscribers with the ABC national feed for at least 60 days after the Oct. 13 opt-in deadline, it said.
A 60-day blackout of access to ABC content for Fubo subscribers would result in “enormous revenue losses,” and higher costs to Fubo, estimated at $47 million-$75 million, said the complaint. A lengthy blackout would “inflict substantial reputational harm” that would “severely impact its ability to regain lost subscribers, continue its recent quarterly subscriber base increase, and ultimately, achieve its economic targets as a growth company," it said.
The NewsNation agreement has a provision limiting liability inter alia for loss of business, revenue, or anticipated profit, “such that the harm to Fubo will be irreparable,” it said. Nexstar didn’t comment Friday.