Jamie Spencer
Details of the Merger
Disney (DIS) announced its first significant media deal of 2025, combining its Hulu + Live TV business with sports streaming service FuboTV (FUBO). Under the agreement, Disney will hold a 70% stake in the new entity, while Fubo shareholders will control the remaining 30%. The merged business will retain the Fubo name and operate as a publicly traded company.
The merger also resolves litigation between Fubo and Disney, Fox (FOX), and Warner Bros. Discovery (WBD) over the Venu Sports project, a previously planned sports streaming platform.
Market Reaction
Following the announcement, Fubo’s stock soared nearly 250% on Monday. Disney’s stock remained relatively unchanged, while Fox and WBD shares saw modest increases of about 1% and 3%, respectively.
Creating a Digital Pay-TV Powerhouse
The merger will create one of the largest digital pay-TV providers, addressing the growing demand for cable alternatives amid increasing cord-cutting. With over 6.2 million North American subscribers and projected revenue exceeding $6 billion, the new company expects to achieve immediate cash flow positivity.
Hulu + Live TV provides access to approximately 100 live TV channels, including sports, news, and entertainment. Fubo, known for its sports and news content, will now expand its offerings to include more consumer options, such as access to ESPN+ through updated distribution agreements.
Financial and Strategic Implications
The agreement includes $220 million in immediate cash for Fubo, along with $145 million in committed financing available in January 2026 to bolster liquidity and support ongoing investments. Fubo CEO David Gandler, who will also lead the combined entity, emphasized the merger’s potential to enable diverse growth strategies both domestically and internationally.
“Crucially, Fubo has the potential to create skinnier sports, news, and entertainment bundles according to consumer needs,” Gandler said, highlighting the distinct roles of Hulu + Live TV as an entertainment-focused service and Fubo as a sports-centric platform.
Settlement of Antitrust Lawsuit
The merger resolves Fubo’s antitrust lawsuit against Disney, Fox, and WBD, which alleged the companies leveraged their control over sports content to inflate costs and limit competition. The lawsuit, filed last year, accused the media giants of bundling sports rights with less desirable content, increasing distribution costs, and restricting Fubo’s ability to offer tailored packages.
With the settlement, Venu Sports, the planned joint streaming service priced at $42.99 per month, is expected to proceed with fewer obstacles. The service aims to combine the sports rights portfolios of Disney, Fox, and WBD, addressing investor demands for profitability and scalability in the competitive streaming landscape.
