The Walt Disney Co. announced today that it is acquiring a majority stake in streaming service Fubo TV and combining it with its Hulu + Live TV MVPD service, resulting in a combined U.S. subscriber base of 6.2 million. The combined business will operate under the Fubo publicly traded company name and be led by the current management team; Fubo and Hulu + Live TV will continue to be available to consumers as separate offerings.
Under the terms of the definitive agreement, at closing Disney will own about 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.
The merger puts an end to a contentious period between the two companies in which Fubo has battled Disney over what it views as unfair competition from Disney’s collaboration with Fox and Warner Bros. Discovery on the new Venu streaming service. A judge halted the launch of Venu last August over antitrust concerns.
As part of the deal, the two companies said they have settled all litigation. Disney has also inked a new carriage agreement with Fubo that will allow Fubo to create a new Sports & Broadcast service, featuring Disney’s sports and broadcast networks including ABC, ESPN, ESPN2, ESPNU, SEC Network, ACC Network and ESPNEWS, as well as ESPN+. The combined company will negotiate carriage agreements with content providers for both Hulu + Live TV and Fubo services independently from Disney.
But it didn’t come without a cost: As part of the deal, Disney, Fox and Warner Bros. Discovery will make an aggregate cash payment to Fubo of $220 million. In addition, Disney has committed to provide a $145 million term loan to Fubo in 2026 as part of the transaction.
Additionally, a termination fee of $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.
Although the merger will provide a subscriber boost, Hulu + Live TV will still rank behind YouTube TV in terms of subscribers. YouTube TV most recently reported about 8 million subscribers, but that was a year ago and does not reflect the affect of last month’s $10 rate hike will have on numbers going forward. YouTube TV now costs $83 per month while a subscription to Hulu + Live TV (which also includes Hulu original content, something YouTube does not), ranges between $82 and $95 per month.
The transaction is subject to regulatory approvals, Fubo shareholder approval, and the satisfaction of other customary closing conditions.
“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,” Gandler said. “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.”
Added Disney Executive Vice President and Head of Corporate Development Justin Warbrooke: “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.”
