Disney is set to merge its streaming service Hulu + Live TV with sports-focused platform Fubo in a deal that will also resolve ongoing legal disputes regarding Venu Sports.
Both Fubo and Hulu + Live TV provide viewers with the ability to stream live broadcast and cable channels across a variety of internet-enabled devices, including smart TVs, smartphones, and tablets.
The newly formed entity will be primarily governed by Fubo’s leadership team and will retain Fubo’s publicly traded name, while Disney will hold a controlling interest with a 70% stake.
The combined subscriber base of Fubo and Hulu + Live TV will total approximately 6.2 million users in North America.
Upon the conclusion of the merger, customers will still be able to access Fubo and Hulu + Live TV as distinct services.
Fubo’s CEO, David Gandler, highlighted that this merger aligns with their mission to enhance customer offerings and operational scalability.
He noted that it would also bolster Fubo’s financial standing and facilitate a path to positive cash flow.
As part of the agreement, Disney has pledged a $145 million term loan that extends to 2026 for Fubo.
In certain cases, a termination fee for Fubo amounting to $130 million may also be applicable.
Additionally, Disney will partner with Fubo to enable the creation of a new sports and broadcasting service that will showcase Disney’s extensive sports networks, including ABC, ESPN channels, and ESPN+.
Furthermore, both companies announced that Fubo has resolved all existing lawsuits with Disney and ESPN over the Venu Sports project, which was initially conceived by a coalition including ESPN, Fox, and Warner Bros. Discovery.
Fubo has also reached an agreement that resolves disputes with Fox and Warner Bros. Discovery.
Back in August, a federal judge approved Fubo’s request for a preliminary injunction against Venu Sports, and just last month, this same judge rejected Venu’s motion to dismiss the case.
As a result of the settlement, Disney, Fox, and Warner Bros. Discovery are expected to make a collective payment of $220 million to Fubo.
Following the news, shares of Fubotv Inc. surged by over threefold during afternoon trading on Monday, while Disney’s stock experienced a slight increase.