Sports streaming platform company Fubo TV Inc FUBO shared an update from the company on Monday that could change how it positions itself going forward. Here’s what the company said and what might be next for shareholders.
What happened: FuboTV shares rose sharply on Monday after the company released its preliminary third-quarter results.
The company said third-quarter revenue for North American streaming is expected to be $210 million, ahead of a previously guided range of $200-205 million. The company also said Rest of the World streaming revenue is expected to be $5.5 million or more, consistent with a previous guidance target of $5-6 million.
FuboTV said paying subscribers in North America in the third quarter are expected to be 1.22 million, up 27% year-over-year. The figure comes ahead of previous forecasts of 1.135 million to 1.155 million. Paying subscribers in the rest of the world are expected to reach 350,000 for the third quarter, amid the company’s forecast of 340,000 to 360,000.
“FuboTV’s strong preliminary results in the third quarter of 2022 reflect significant progress against our continued mission to cost-effectively scale a differentiated global live TV streaming platform for the widest variety of premium content and interactivity. “said the CEO and co-founder of FuboTV. David Gander said.
Fubo also announced the closure of its Fubo Gaming and Fubo Sportsbook subsidiaries.
“Following our previously announced strategic review, we have concluded that the continuation of Fubo Gaming and Fubo Sportsbook in this difficult macroeconomic environment would impact our ability to meet our longer-term profitability objectives. Accordingly, we have taken the difficult decision to immediately exit the online sports betting industry.”
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Why it matters: The release of sports betting by FuboTV might come as a bit of a surprise. The company has focused on potential growth and reaching new audiences using this line of business.
“We look forward to providing more color, as well as discussing our full third quarter 2022 results and full-year outlook, on our November 4 earnings call,” Gandler said.
As news of Fubo’s exit from the sportsbook has come out, some users have reported issues with being able to withdraw money from the app. A report from Action Network said that users cannot withdraw money from the Fubo Sportsbook app.
“Effective immediately, Fubo Sportsbook no longer accepts bets. We are working with the necessary parties to ensure that players and their existing accounts will be appropriately managed,” said FuboTV’s Senior Vice President of Communications. Jennifer press told Action Network.
The Fubo Sportsbook was live in Iowa, Arizona and New Jersey. Plans also called for the app to go live in Ohio next year with a partnership with NBA team Cleveland Cavaliers.
Fubo acquired Victoire, a sports betting infrastructure company, which reportedly failed to find a new buyer. The company also had licenses pending in several states.
The sports betting market continues to grow as more states legalize it and more sports leagues and media partners become friendlier in discussing the concept openly.
While there are huge revenue potentials for sports betting, the market is also very saturated and highly promotional, in many cases leading to losses for companies in the sector. Companies such as ProjectKings Inc DKNG and others spend hundreds of millions to acquire customers and entice them with promotional offers. Only FanDuel, property of Flutter Entertainment PDYPY showed a profitability model for its sports betting division in the United States.
The exit could be bad in the short term with a loss incurred on leaving the business. Considering the industry and the competitive nature, FuboTV could do the right thing and focus on what it does best: sports streaming.
FuboTV could also seek to partner with a sports betting company to generate revenue through segment growth without taking on the financial risk.
FUBO Price Action: FuboTV shares are down 7.65% at $3.80 on Wednesday on the release from a 52-week range of $2.32 to $35.10.
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