Disney Merging Hulu + Live TV Business with Fubo

FuboTV and The Walt Disney Company just announced a major deal that will impact how we watch streaming content. In this new agreement, Disney will combine its Hulu + Live TV service with Fubo, creating a powerful new virtual MVPD company. The goal of this partnership is to provide consumers with a wider range of programming options to choose from. This deal is still pending regulatory approvals, approval from Fubo shareholders, and the satisfaction of other standard closing conditions.
Once the deal is finalized, Disney will own 70% of Fubo. And the current management team at Fubo, including CEO David Gandler, will continue to run the combined Fubo and Hulu + Live TV business. Both Fubo and Hulu + Live TV offer customers the ability to stream live broadcasts and cable networks on various devices, making it easy to watch their favorite shows and sports on the go. By merging Fubo and Hulu + Live TV, which have a total of over 6.2 million subscribers in North America, consumers can expect a wider range of programming packages at competitive prices.
As part of this agreement, Disney will sign a new carriage deal with Fubo. This means that Fubo will be able to offer a Sports & Broadcast service featuring Disney’s top sports and broadcast networks, such as ABC, ESPN, and ESPN+. Even after the merger, Fubo and Hulu + Live TV will continue to operate as separate services. Hulu + Live TV will still be available through the Hulu app, while Fubo will keep streaming its impressive lineup of live sporting events in the Fubo app.
The combined company will negotiate content agreements independently from Disney. This means that Fubo and Hulu + Live TV will have the flexibility to secure programming deals that cater to their audiences specifically. The majority of the board of directors at Fubo will be appointed by Disney, but Gandler will also serve on the board as CEO. This deal is expected to bring in the resources and support of Disney to help drive growth and profitability for the combined company.
This agreement will also benefit Fubo shareholders. By joining forces, the combined business will be able to offer more diverse programming, encourage innovation, and create new sales and marketing opportunities. The merged company is projected to be financially sound and generate cash flow immediately after the deal closes.
As part of the deal, Fubo has settled all previous litigation with Disney, ESPN, FOX, and Warner Bros. Discovery. In addition, Disney, FOX, and Warner Bros. Discovery will make a cash payment of $220 million to Fubo. Disney has also committed to providing a $145 million term loan to Fubo as part of the transaction. And in case the deal falls through due to certain reasons, a termination fee of $130 million will be paid to Fubo.
Financial advisors like Wells Fargo and Evercore are working with Fubo on this transaction, along with legal advisors Latham & Watkins and Kellogg Hansen. On the other side, Centerview Partners and Cravath, Swaine & Moore are assisting The Walt Disney Company with financial advice and legal counsel.
In a statement, David Gandler expressed excitement about the partnership and highlighted the benefits it will bring to consumers, shareholders, and the streaming industry. Justin Warbrooke from The Walt Disney Company echoed this sentiment, emphasizing the opportunity for both Hulu + Live TV and Fubo to provide more options and value to their subscribers.