FuboTV has confirmed that its Fubo Sportsbook brand has ceased operations and has closed following a strategic review of the division, effective immediately.
In a preliminary Q3 trading update, the streaming platform confirmed the closure of its Fubo Gaming subsidiary and, in turn, the termination of its branded sportsbook’s operations, citing problems with funding requirements.
Fubo Sportsbook closed following strategic review
Problems were first hinted back in August when, during the platform’s Q2 earnings call, CEO David Gandler notified investors that the sportsbook division would be placed under strategic review, initially aiming to find a strategic partner to help grow the division in a fiscally sensible manner.
However, FuboTV has now admitted that ‘while multiple parties expressed interest’, none of those opportunities would have given Fubo the breathing space required in terms of funding for its sportsbook. Given the pressures to aim for profitability, the firm has decided to close Fubo Sportsbook.
Gandler explained: “Following our previously announced strategic review, we have concluded that continuing with Fubo Gaming and Fubo Sportsbook in this challenging macroeconomic environment would impact our ability to reach our longer-term profitability goals.
“Therefore, we have made the difficult decision to exit the online sports wagering business effective immediately.”
For its financial woes, Fubo Sportsbook was making inroads in the US online sports wagering industry, launching in New Jersey in early September, when it unveiled a partnership with the New York Jets.
Indeed, the brand was live in three states, with Arizona and Iowa also on its live list, yet those pressures to reach profitability proved too much for the leadership team.
Launched in 2021, Fubo Sportsbook was born out of Fubo’s acquisition of Vigtory and was designed to supplement its streaming app by offering users the opportunity to watch sports whilst betting on the game simultaneously in one app.
Commenting on the acquisition of Vigtory and, subsequently, the birth of Fubo Sportsbook, Gandler noted: “We believe online sports wagering is a highly complementary business to our sports-first live TV streaming platform. We don’t see wagering as simply an add-on product to fuboTV. Instead, we believe there is a real flywheel opportunity with streaming video content and interactivity.”
Yet, just 21 months later, the gaming division has been closed with funding pressures proving too much and investors demanding profitability.
Working towards path to profitability
The company has laid out ambitions for profitability by 2025, and the preliminary figures detailed offer an insight into how close that ambition will be to reality.
Within the preliminary trading update, the company anticipates Q3 North American revenues to stand at around $210m, which exceeds the previous guidance of $200m – $205m and is up 34% year-over-year. Meanwhile, the rest of the world’s revenues are expected to stand at $5.5m.
North American paid subscribers are expected to increase too by 27% up to 1.22m, whilst the rest of the world’s paid subscribers is anticipated to reach around 350,000.
Despite growth on topline figures, Fubo anticipates a negative adjusted EBITDA figure of $100m for Q3, reflecting the need to trim the fat off in terms of unnecessary costs.
Gandler retains his enthusiasm for the future and noted that the company has ‘demonstrated a continued progression towards the 2025 profitability targets.’
He concluded: “FuboTV’s strong preliminary third quarter 2022 results reflect meaningful advancements against our continued mission to profitably scale a leading global live TV streaming platform differentiated by the greatest breadth of premium content and interactivity.
“We expect to deliver strong revenue and subscriber growth in Q3, exceeding our previously issued guidance in North America, against the backdrop of a highly competitive operating environment. We’re pleased with this expected performance, and our progress toward achieving our positive cash flow target in 2025.”