In a significant move that promises to reshape the streaming television landscape, Disney has announced a merger between its Hulu+ Live TV service and Fubo, a notable player in the internet TV industry. The deal, revealed on a Monday, will see Disney becoming the majority owner of the newly formed entity, securing a 70% stake in the company, while existing Fubo shareholders will manage the remaining 30%. This merger brings together two distinct services that mirror traditional cable TV bundles through offering access to linear TV networks, thus solidifying their position in the competitive streaming market.
The combined subscriber count for Hulu+ Live TV and Fubo is approximately 6.2 million, emphasizing the relevance of both platforms in the growing content consumption arena. Crucially, after the merger is finalized, both services will continue to operate independently. Subscribers can access Hulu+ Live TV through the Hulu app as part of a comprehensive bundle alongside Disney+ and ESPN+. It is important to note that the deal does not encompass Hulu, which is recognized for its original content offerings, including critically acclaimed series like “Only Murders in the Building” and “The Handmaid’s Tale.” These originals position Hulu as a direct competitor to popular streaming platforms such as Netflix.
The financial markets reacted dynamically to the merger announcement, with Fubo’s stock soaring as much as 170% during early trading, although it later moderated those gains. Fubo co-founder and CEO David Gandler expressed optimism about the deal, stating that it is expected to make the company “immediately cash flow positive” at the close of the merger. This assertion positions Fubo to emerge as a formidable player within the evolving streaming landscape. The stock price, which had closed at $1.44 the previous Friday, reflects investor confidence in the success of this merger.
The merger also brings closure to existing litigation between Fubo and Disney regarding a proposed sports streaming service named Venu, which involved Disney, Fox, and Warner Bros. Discovery. Fubo had previously litigated against this venture, asserting that it posed anticompetitive risks. The resolution of this legal dispute is pivotal, as it marks a strategic alignment of interests that could enhance the competitive viability of the combined service in an already contentious industry. As part of the deal’s conclusion, Disney, Fox, and Warner Bros. Discovery will make a collective cash payment of $220 million to Fubo, alongside a $145 million term loan commitment from Disney set for 2026. Moreover, should the merger collapse, Fubo stands to gain a $130 million termination fee.
Going forward, Fubo’s existing management team, led by Gandler, will helm the newly formed entity, though Disney will appoint a majority of the board of directors. This setup aims to leverage the strengths of both companies while providing a novel content-rich proposition to consumers. A newly established carriage agreement between Disney and Fubo will potentially pave the way for the creation of innovative sports and broadcasting services incorporating Disney’s coveted networks.
This deal suggests that both companies are focusing on not just survival but growth in the increasingly competitive streaming arena, as they join forces to deliver diverse content offerings to a wider audience.