New York: In a surprising announcement on Monday, Disney’s Hulu + Live TV service and Fubo have revealed plans to merge, forming one of the largest pay TV providers in the United States. This strategic partnership could also pave the way for the Venu Sports streaming service to move forward.
Details of the Merger
Under the new agreement, Disney will own a 70% stake in Fubo, while the existing management team of Fubo, led by co-founder and CEO David Gandler, will oversee the combined entities. This merger will create a powerful streaming cable service boasting 6.2 million subscribers, positioning it as the second-largest streaming pay TV provider, just behind YouTube TV.
As part of this arrangement, Fubo will withdraw its lawsuit against Venu Sports, a joint venture involving Disney, Fox Corporation, and Warner Bros. Discovery (WBD). The merger agreement stipulates that Disney, Fox, and WBD will pay Fubo $220 million, with Disney also providing a $145 million loan to Fubo to be repaid through 2026.
David Gandler expressed enthusiasm about the merger, said, “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.”
Impact on Fubo’s Stock
Following the announcement, shares of Fubo skyrocketed by more than 200%, reflecting investor optimism about the merger and its potential benefits.
New Carriage Deal and Streaming Services
The merger will not encompass the Hulu subscription service but will involve Disney negotiating a new carriage deal with Fubo. This deal will facilitate the creation of a new Sports & Broadcast service, which will feature Disney’s sports and broadcast networks, including ABC, ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, and ESPN+.
Subscribers will still be able to access both Fubo and Hulu + Live TV using their individual platforms. The Hulu + Live TV service will remain available on the Hulu app and will be included in the Hulu, Disney+, and ESPN+ bundle. Likewise, Fubo will retain its dedicated app for users.
The Venu Sports Lawsuit
The merger marks a significant turn in the ongoing legal battle between Fubo and the joint venture partners, as Fubo previously filed a lawsuit to block the launch of the Venu Sports service, which was scheduled for August 2024. This new service is intended to provide cord-cutters access to a variety of sporting events, featuring content from the NFL, NBA, MLB, NHL, tennis, soccer, golf, NASCAR, and UFC matches.
While WBD has already integrated its existing live sports offerings into its Max streaming service, Disney is preparing to launch a standalone direct-to-consumer ESPN streaming service later this year.
Conclusion
The merger between Disney’s Hulu + Live TV service and Fubo marks a significant development in the streaming landscape, creating a robust platform that promises to enhance viewer choice and flexibility. With a growing subscriber base and the potential launch of new services, this partnership is set to reshape the future of sports streaming and pay TV in the United States.