Disney to merge Hulu + Live TV with FuboTV

The Walt Disney Company will combine its Hulu + Live TV business with sports live-streaming service FuboTV, forming a combined virtual multichannel video programming distributor (MVPD) company.

Under the terms of the definitive agreement, Disney will own 70% of Fubo. Fubo’s existing management team, led by Fubo co-founder and CEO David Gandler, will operate the newly combined Fubo and Hulu + Live TV businesses.

By combining Fubo and Hulu + Live TV, which together have over 6.2 million subscribers in North America, the new entity will become the second-largest online pay-TV company in the region, following YouTube TV, according to Reuters. 

While the combined business will operate under the Fubo publicly traded company name led by the existing Fubo management team, Fubo and Hulu + Live TV will continue to be available to consumers as separate offerings.

The transaction will provide the combined company with the resources and support of Disney, and the existing Fubo management team will continue to focus on driving growth and profitability. The combined business will realise synergies through more flexible programming packaging to cater to all audiences, greater innovation, and sales and marketing opportunities.

The transaction will also enhance consumer choice by making available a broad set of programming offerings, according to the release. Fubo and Hulu + Live TV each provide customers the ability to stream live broadcast and cable networks on their connected TVs, mobile phones, tablets, and other internet-connected devices. Furthermore, Disney will enter into a new carriage agreement with Fubo that will allow Fubo to create a new sports and broadcast service, featuring Disney’s premier sports and broadcast networks including ABC, ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, as well as ESPN+.

In conjunction with the transaction, Fubo has settled all litigation with Disney and ESPN related to Venu Sports, the previously announced sports streaming platform planned by ESPN, FOX and Warner Bros. Discovery. Fubo has also settled all litigation with FOX and Warner Bros. Discovery, according to the release. 

Under the litigation settlement, the companies will pay Fubo US$220 million in cash, with Disney also committing to a US$145 million term loan for Fubo in 2026. Additionally, a termination fee of US$130 million will be payable to Fubo under certain circumstances, including if the transaction fails to close due to the failure to obtain requisite regulatory approvals on the terms and conditions set forth in the definitive agreement.

Back in February last year, FuboTV sued the three companies, alleging that Venu's partners engaged in anti-competitive practices that stifled competition for sports fans. The lawsuit focused on "bundling," where distributors such as Fubo must carry rarely watched networks to access valuable live sports programming, which Fubo claimed hindered its ability to create a sports-centric service.

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“We are thrilled to collaborate with Disney to create a consumer-first streaming company that combines the strengths of the Fubo and Hulu + Live TV brands. This combination enables us to deliver on our promise to provide consumers with greater choice and flexibility. 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, said Gandler. 

Justin Warbrooke, executive vice president and head of corporate development, The Walt Disney Company, said: “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. 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.”

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