Disney announced Monday that it is merging its Hulu + Live TV business with rival FuboTV. This could pave the way for the company to launch its stalled sports streaming business with Fox Corp. and Warner Bros. Discovery.
The combined company will create the second-largest Internet pay-TV provider in North America, behind YouTube TV, with approximately $6 billion in revenue and 6.2 million subscribers.
Disney will hold a 70% majority stake in the business, which will be led by Fubo CEO and co-founder David Gandler.
As part of the deal, Fubo will drop its lawsuit against Bob Iger's Disney and ESPN related to the sports bundle Venu, which was scheduled to launch last fall.
“This combination allows us to deliver on our promise to offer consumers greater choice and flexibility,” Gandler said of the merger.
“Furthermore, this agreement allows us to effectively scale, strengthens Fubo’s balance sheet and enables us to secure positive cash flow, which will benefit consumers, shareholders and It's a win for the entire streaming industry.”
The deal does not include streamer Hulu, which distributes original series such as “Only Murders in the Building” and “The Handmaid's Tale,” which competes with platforms such as Netflix, Amazon Prime Video and Apple.
Nevertheless, the combination of Fubo and Hulu + Live TV allows customers to stream a wide range of live broadcasts and cable networks on their connected TVs, phones, tablets, and other internet-connected devices. .
Fubo and Hulu + Live TV will continue to be offered to consumers as separate services after the merger, the companies said.
Hulu + Live TV will continue to stream on the Hulu app and will be available as part of the Hulu, Disney+, and ESPN+ bundle. Fubo livestreams more than 55,000 sporting events annually and will continue to offer the service to subscribers through the Fubo app.
The deal ends a bitter legal battle that has prevented Disney, Fox and Warner Bros. Discovery from launching their own sports-focused streaming providers.
In February, Fubo sued major media outlets.said Venu violated U.S. antitrust laws by reducing competition and jacking up prices.
A district court judge ruled that Fubo's antitrust claims were likely to succeed and issued an injunction temporarily blocking Venu from launching.
After reaching a legal settlement, both companies plan to ask a judge to overturn the judgment.
As part of the deal, Discovery will make a total cash payment of $220 million to Fubo, and Disney has committed to providing Fubo with a $145 million term loan in 2026, the companies said. Ta.
Fubo stock, which had a market value of about $480 million at the last close, soared nearly 141% to $3.46 in early trading. Disney rose slightly.
Fubo's stock price fell more than 60% in 2024 as the company's revenue growth slowed and competition from larger rivals increased.
As part of Monday's announcement, Disney will enter into a new transportation agreement with Fubo that will allow Fubo to build a new sports service featuring Disney's sports and broadcast networks, including ABC, ESPN and ESPN+.
The contract includes a termination fee of $130 million.
“This combination will enable both Hulu + Live TV and Fubo to enhance and expand our virtual MVPD services, offering consumers even more choice and flexibility,” said Disney Executive Vice President and Corporate said Justin Warbrook, Director of Development.
“We have confidence in Fubo's management team and their ability to deliver the content their subscribers want, deliver high-quality service that delivers great value, and grow their business,” he added. .
