Disney and Fubo have reached an agreement to merge Hulu + Live TV and FuboTV, the companies announced in a press release. This will create a new entity in which Disney will own 70 percent and Fubo will acquire the remaining 30 percent. Combined, the service will have more than 6 million subscribers and become the second-largest digital pay-TV provider behind YouTube TV.
As noted by Bloomberg, the deal only includes Hulu + Live TV, not the traditional Hulu subscription. The combined business will operate under Fubo and current management will remain in place, but FuboTV and Hulu + Live TV will continue to stream as separate entities. The new venture will involve negotiating transportation contracts with content providers without assistance from Disney.
Fubo plans to use its deal with Disney and broadcast networks like ABC and ESPN to launch a new live streaming service specifically for sports. As part of the agreement, Fubo will drop all legal claims against it regarding Venu Sports.
Venu is a sports-focused streaming service that will carry content from Disney/ESPN, Warner Bros. Discovery, and Fox. The multi-company streamer was scheduled to launch last fall, but was delayed due to an antitrust lawsuit filed by Fubo. With a public hearing scheduled for January 6th, the merger announcement certainly has auspicious timing.
Today’s deal means Venu Sports could be back on the scene soon. Anonymous sources told The Hollywood Reporter that this is likely the plan, but they don’t know if or when it will be available.
The deal also includes new distribution rights between Fubo and Disney, allowing Fubo to offer bundles built around ESPN and ABC. In addition, Disney, Fox and Warner Bros. Discovery will pay Fubo $220 million, and Disney will loan the company an additional $145 million.
The merger is expected to close within the next 12 to 18 months, pending regulatory approval. There is a clause in the contract that obligates Disney to pay Fubo $130 million if the deal doesn’t go through for any reason.
