Disney Hulu + Live TV merging with Fubo to pave path for Venu Sports

Disney has announced an exciting merger with FuboTV, bringing together Hulu + Live TV with a smaller competitor to pave the way for a new sports streaming venture with Fox Corp and Warner Bros Discovery. This move creates the second-largest online pay-TV company in North America, following YouTube TV, with approximately $6 billion in revenue and 6.2 million subscribers. The services offer cable TV-like channel packages over the internet, providing an alternative to traditional cable or satellite subscriptions.

Disney will have a 70% majority stake in the combined Fubo and Hulu + Live venture, which will be headed by Fubo CEO David Gandler. The deal specifically excludes Hulu’s main video-streaming business. Investors on Wall Street responded positively to the news, with Fubo’s shares skyrocketing by about 260% to $5.18 in afternoon trading. Meanwhile, Disney’s stock saw a slight increase.

As part of this agreement, Fubo has requested the dismissal of its lawsuit against Venu Sports, a streaming service planned by Disney, Fox, and Warner Bros Discovery. The settlement includes a payment of $220 million in cash to Fubo, along with a $145 million term loan from Disney in 2026. The lawsuit, filed by Fubo last February, alleged that Venu’s partners were engaging in anti-competitive practices, hindering competition for sports fans, particularly through the practice of “bundling.”

Fubo had argued that this bundling practice made it difficult for them to secure rights to offer a sports-focused service like Venu. U.S. District Judge Margaret Garnett had previously sided with Fubo, issuing an injunction against the launch of Venu. Venu’s partners were set to appeal this ruling in the U.S. Court of Appeals on Monday.

Disney’s partnership with Fubo will also involve a licensing agreement, allowing Fubo to create a sports-focused service featuring Disney’s sports and broadcast networks, such as ABC, ESPN, and ESPN+. This collaboration reflects Fubo’s goal of delivering flexible and competitive content packages to consumers, especially in the realm of sports.

Despite Fubo’s challenges in 2024, including a significant drop in share value and increased competition, the company will continue to operate alongside Hulu + Live TV as separate offerings after the merger. Fubo will maintain its focus on delivering sports and news content, while Hulu + Live TV will cater to entertainment-focused audiences. Ultimately, the new product resulting from this merger will operate under the Fubo name and be overseen by Fubo’s CEO, indicating Disney’s shift towards prioritizing streaming over traditional pay TV services.