New York Jets Say Fubo Sportsbook in Default on $12.4M Partnership Deal
Posted on: November 9, 2022, 06:14h.
Last updated on: November 9, 2022, 06:36h.
The New York Jets have taken a dispute with Fubo Gaming to court and are seeking its former sports betting partner to be placed in receivership.
The NFL team made the request in the Delaware Court of Chancery, Casino.org has learned. That comes after it notified Fubo leaders late last month the company was in default on a five-year sponsorship agreement reached with the FuboTV subsidiary in August 2021.
According to a demand letter Casino.org received, Fubo had agreed to pay the Jets $12.4 million in sponsorship fees over the term of the deal. However, the letter claimed Fubo failed to pay a nearly $1.2 million installment that was due on Oct. 1.
On Oct. 17, FuboTV announced that it was pulling the plug on its sports betting and gaming operations after it failed to find a suitable partner during a two-month strategic review.
Fubo Sportsbook was operational in Arizona, Iowa, and New Jersey. The Jets partnership was a key part of Fubo’s New Jersey plans, as the team plays its games at MetLife Stadium in the New Jersey Meadowlands.
In the demand letter, an attorney representing the Jets told Fubo Gaming President Scott Butera and FuboTV Vice President of Legal and Business Affairs Greg Riches that the team had “fully performed” its duties in the agreement. That included providing Fubo with “substantial” promotional benefits, a suite and tickets to home games, and investing in the construction, staffing, and operation of the Fubo Sportsbook Lounge at the stadium.
Jennifer Press, a spokesperson for Fubo, told Casino.org in a statement that the company believes the Jets case is meritless and that Fubo will “vigorously defend” itself.
A Jets spokesperson declined to comment on the matter.
‘Blatant Act of Bad Faith’
The letter also indicated the Jets only found out about Fubo Sportsbook’s demise through public reports.
These actions by Fubo are a blatant act of bad faith,” wrote Andrew L. Lee, an attorney with Foley & Lardner in the Oct. 25 letter. “The Jets intend to take all actions necessary to recover the damages suffered as a result of Fubo’s defaults and bad faith.”
However, the Jets also stated a willingness to reach “a mutually agreeable resolution.” Another lawyer representing the team had a conversation with a Fubo lawyer who said the streaming service provider was interested in a resolution, but the company had “minimum assets to satisfy creditor claims.”
Fubo was one of two sports betting partners the Jets had. The other is WynnBET.
Fubo Exploring Gaming Options
Last Friday, Fubo senior executives held the company’s third-quarte earnings call with investment analysts. During the presentation, they gave additional details about the decision to scrap the gaming operations immediately.
Cofounder and CEO David Gandler told analysts the hard choice to close the sportsbook was made after “much careful deliberation.” But he added it was made with the thought of putting the company’s resources behind the streaming service business.
He added that the company has had “pretty healthy” discussions with sportsbooks to see if the company can leverage its assets – both the technology and its audience of sports-focused streaming consumers – for a strong return.
We remain open to the possibility of exploring ways to optimize our assets in the gaming space without investing our own capital,” Gandler said. “The closure of our Fubo sportsbook, along with our sharp focus on the judicious deployment of capital and cash preservation provides us with added confidence in our current liquidity position.”
CFO John Janedis said he was upset about jettisoning gaming, but that he understood the reason for the decision.
“We had about seven to 10 days of work in New Jersey, where without any marketing or really any activity, we saw daily and weekly upticks in new accounts related to watching Fubo channels on the platform,” he said.
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Source: casino.org
