Fubo stock nosedived today after the streaming pay TV platform projected declining revenues and subscribers in the current quarter, and a drop in subs in the last quarter.
Fubo did not address on an earnings call a report that the Department of Justice is probing Walt Disney’s planned purchase of Fubo, which presuming it occurs, will see the streamer blended with Hulu + Live TV. Fubo’s executives reiterated that the company looked forward to completing the transaction next year
“Looking ahead, our North America guidance for 2q 2025 calls for subscribers of 1.225 million to 1.25 million or a 14% year over year decline at the midpoint,” said John Janedis, Fubo’s chief financial officer, “and revenue of $340 million to $350 million a 10% decline at the midpoint.” This is on top of a 2.7 percent decline in subs in the recently completed first quarter, and a projection of a 17 percent sub decline in the current quarter for countries outside North America,
Some of the decline is seasonal, with the sub headcount typically rising in the late summer with the start of college football and the NFL. Also last year saw the Copa America tournament, which drew in subs, and then the loss of content channel Televisa, which hurt Fubo’s Hispanic themed bundle. Fubo blamed the loss of Televisa for a 17 percent decline in advertising to $22.9 million.
Fubo’s founder and CEO David Gandler said Fubo remains on track to have a sports-themed bundle by late summer. Thus far it appears only Disney has committed its sport channels to this initiative, though Gandler said conversations are ongoing with other content providers.
“We are working hard to secure content from non-Disney programmers for the new service,” Gandler said. “It is critical for Fubo subscribers that we are able to negotiate content licensing agreements at fair rates and terms. Our goal remains to launch the service for the fall sports season.”
Sports bundles were at the heart of Fubo’s now settled lawsuit against Disney, Fox, and Warner Bros. Discovery for their since scuttled Venu Sports streaming app. Fubo argued the three content providers disallowed pay TV platforms from stripping aways sports channels for a sports only bundle, but were doing so with their own app.
In August 2024 Fubo won a court order enjoining the app, which ultimately led to a settlement that included Disney to become the majority owner of Fubo and the combination with Hulu + Live TV. Since that agreement, reports have surfaced that the DOJ is examining the combination for possible antitrust issues.
Ironically the DOJ is looking at whether the combination concentrates the market for sports streaming, which is why Fubo sued the Venu partners in the first place.
One Wall Street source wondered if Fubo’s weak results will actually help the proposed merger avoid a DOJ impasse as a subscriber bleeding entity may not seem as such a threat.
“The weaker you look, the harder it is to call you a monopoly and block the merger,” this source said.
Fubo’s earnings release was not all bad news. Adjusted earnings per share loss in the first quarter was $0.02, compared to an adjusted EPS loss of $0.14 in first quarter 2024. And cash flow was -$1.4 million, a $37.4 million improvement when compared to the first quarter 2024, keeping the company on track for its first profitable quarter.
But investors were unimpressed. Shares were down this morning by as much as 12 percent while the overall markets are up notably.