Shares of sports-based streaming service fuboTV (NYSE: FUBO) took a sharp decline today, Monday, after an initial surge in the early trading hours. The company's stock was down 18% as of 4:02 p.m. ET, after trading as high as 10.9% this morning, shortly after the market open. The market reaction followed news that Disney (NYSE: DIS) and Charter Communications (NASDAQ: NASDAQ:CHTR) had resolved a dispute that led to the removal of Disney's channels from Charter's Spectrum cable service at the beginning of this month.
The resolution came just ahead of the first Monday Night Football game tonight, which was anticipated to drive viewers to fuboTV due to the blackout on Spectrum. Prior to the agreement, fuboTV's stock had benefited from the dispute, rising 13% on September 1 and adding another 10% on September 5 as markets opened after Labor Day weekend with Disney's blackout still in effect.
Investors speculated that viewers unable to watch college football or the U.S. Open tennis tournament on Spectrum would turn to fuboTV instead. However, there has been no clear evidence that fuboTV experienced a significant spike in viewership due to the blackout.
Despite this temporary boost, fuboTV faces challenges in its path towards profitability. The company posted a $30.5 million adjusted EBITDA loss and a free-cash-flow loss of $75.8 million. It does not anticipate positive free cash flow until 2025.
While fuboTV's paid subscriber base is growing, competition in sports entertainment is intensifying as tech giants secure exclusive broadcast rights for their own platforms. This trend could pose further challenges for fuboTV in the future.
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