Disney said on Monday it would merge its Hulu + Live TV business with rival FuboTV — a deal that potentially clears the way for the launch of its stalled sports streaming venture with Fox Corp and Warner Bros Discovery.
The merged company will create the second-biggest internet pay-TV provider in North America, behind YouTube TV, with around $6 billion in revenue and 6.2 million subscribers.
Disney will hold a 70% majority stake in the venture, 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-led Disney and ESPN related to Venu, the sports bundle that was supposed to launch last fall.
“This combination enables us to deliver on our promise to provide consumers with greater choice and flexibility,” Gandler said of the merger.
“Additionally, this agreement allows us to scale effectively, strengthens Fubo’s balance sheet and positions us for positive cash flow. It’s a win for consumers, our shareholders, and the entire streaming industry.”
The deal does not include the streamer Hulu, home to original series like “Only Murders in the Building” and “The Handmaid’s Tale,” which competes with platforms like Netflix, Amazon Prime Video and Apple.
Nonetheless, the combination of Fubo and Hulu + Live TV will give customers the ability to stream a broad array of live broadcast and cable networks on their connected TVs, mobile phones, tablets, and other internet-connected devices.
Fubo and Hulu + Live TV will continue to be available to consumers as separate offerings after the merger, the companies said.
Hulu + Live TV will continue to be streamed in the Hulu app and be offered as part of the bundle with Hulu, Disney+ and ESPN+. Fubo, which streams more than 55,000 live sporting events annually, will continue to serve its subscribers in the Fubo app.
The deal ends a bitter legal battle that had blocked Disney, Fox and Warner Bros. Discovery from launching its own sports-focused streaming provider.
In February, Fubo had sued the media giants, saying Venu would violate US antitrust law by reducing competition and driving up prices.
A district court judge found that Fubo is likely to succeed in its antitrust claims and issued the injunction temporarily barring Venu’s launch.
The companies will ask the judge to reverse the decision, following the legal settlement.
As part of the transaction, Discovery will make an aggregate cash payment to Fubo of $220 million, and Disney has committed to provide a $145 million term loan to Fubo in 2026, the companies said.
Shares of Fubo, which had a market value of about $480 million as of last close, surged nearly 141% to $3.46 in early trading. Disney was up marginally.
Fubo’s shares tanked more than 60% in 2024, as the company’s revenue growth slowed and competition intensified from bigger rivals.
As part of Monday’s announcement, Disney will also enter into a new carriage agreement with Fubo that will allow Fubo to create a new sports service featuring Disney’s sports and broadcast networks including ABC, ESPN, as well as ESPN+.
The deal includes a termination fee of $130 million.
“This combination will allow both Hulu + Live TV and Fubo to enhance and expand their virtual MVPD offerings and provide consumers with even more choice and flexibility,” said Justin Warbrooke, Disney’s executive vice president and head of corporate development.
“We have confidence in the Fubo management team and their ability to grow the business, delivering high-quality offerings that serve subscribers with the content they want and offering great value,” he added.
