(Reuters) – The Walt Disney Company said on Monday it is merging its Hulu + Live TV business with smaller rival FuboTV. This could also pave the way for a sports streaming venture with Fox and Warner Bros. Discovery.
The combination will create the second-largest Internet pay-TV company in North America after YouTube TV, with approximately $6 billion in revenue and 6.2 million subscribers.
Disney will hold a 70% majority stake in the business, which will be led by Fubo CEO and co-founder David Gandler. The deal excludes Hulu’s main video streaming business.
As part of the agreement, Fubo will also drop its lawsuit against Disney, Fox and Warner Bros. Discovery’s planned sports streaming service Venu. The companies plan to pay Fubo $220 million in cash, and Disney has also committed to making a $145 million term loan to Fubo in 2026.
FuboTV sued the media giant last February, claiming Venu violated U.S. antitrust laws by reducing competition and raising prices. A district court judge determined that Fuvo’s antitrust claims were likely to succeed and issued an injunction temporarily barring Venu from launching.
“All litigation between Fubo and Disney has been settled,” the companies announced on Monday.
Fubo stock, which had a market value of about $480 million at the last close, soared nearly 141% to $3.46 in early trading. Disney rose slightly.
Fubo’s stock price fell more than 60% in 2024 as the company’s revenue growth slowed and competition from larger rivals increased.
As part of Monday’s announcement, Disney will enter into a new transportation agreement with Fubo that will allow Fubo to build a new sports service featuring Disney’s sports and broadcast networks, including ABC, ESPN and ESPN+.
Fubo and Hulu + Live TV will continue to be available to consumers as separate services after the deal closes.
The contract includes a termination fee of $130 million.
(Reporting by Deborah Sophia in Bengaluru; Editing by Shilpi Majumdar and Shinjini Ganguly)
