Walt Disney Co. has announced the merger of its Hulu + Live TV business with rival FuboTV to create a new sports streaming platform. This move will also enable Venu Sports, the streaming service backed by Disney, Fox Corp, and Warner Bros. Discovery, to launch without any complications.
Moreover, it will make the new service the second-largest online pay-TV company in North America and is projected to generate $6 billion in revenue and attract 6.2 million subscribers. The service will offer internet-based TV packages as an alternative to traditional cable or satellite subscriptions.
Under the agreement, Disney will hold a 70% majority stake, but the merged platform will be led by Fubo CEO and co-founder David Gandler. Hulu’s main video-streaming business, however, will not be part of this merger. Following the announcement, Fubo’s market value surged 260%, rising to $5.18 from $1.44 per share on Friday, while Disney’s shares saw a modest increase.
In addition, Fubo agreed to drop its lawsuit against Venu Sports. Fubo accused the three companies last February of forcing it to include less popular networks in exchange for access to valuable live sports content, which hindered its ability to create a sports-focused service like Venu.
US District Judge Margaret Garnett had ruled that Fubo was likely to succeed in its antitrust claims and temporarily blocked the launch of Venu Sports. Originally, Fubo was set to ask the US Court of Appeals on Monday to reverse this decision. Instead, the three companies will pay Fubo $220 million, with Disney also agreeing to a $145 million term loan for Fubo in 2026 as part of the settlement.
Dan Coatsworth, an investment analyst with AJ Bell, mentioned that while this move helps Disney advance its sports venture, ending the dispute with the court regarding a collaboration with Fox and Warner Bros. Still, Coatsworth added that there are several challenges remaining before the Venu Sports service can become operational.
As for the services of Fubo and Hulu + Live TV themselves, they will continue to be available separately, with Fubo focusing on sports and news, while Hulu + Live TV remains an entertainment-focused cable replacement service. Additionally, Hulu + Live TV will continue to be part of Disney’s package, which includes Disney+, Hulu, and ESPN+.
Ross Benes, senior analyst at Emarketer, mentioned that if the new product is publicly traded under the Fubo name and run by its CEO, it could signal that Disney will step away from being a pay-TV operator and focus entirely on streaming.
Furthermore, Disney will allow Fubo to create a sports-focused service featuring Disney’s sports and broadcast networks, such as ABC, ESPN, and ESPN+. Gandler stated that this agreement will support Fubo’s goal “to deliver flexible, innovative and competitive content packages to consumers, particularly around sports.”
