Hulu + Live TV business to combine with Fubo, clearing way for Venu Sports

Walt Disney Co said on Monday it would merge its Hulu + Live TV business with smaller rival FuboTV in a deal that removes a significant hurdle to the launch of its sports streaming venture with Fox Corp and Warner Bros Discovery.

The combination creates the second-biggest internet pay-TV company in North America, behind YouTube TV, with around $6 billion in revenue and 6.2 million subscribers.

Disney will hold a 70% majority stake in the combined Fubo and Hulu + Live venture, which will be led by Fubo CEO and co-founder David Gandler. The deal excludes Hulu’s mainstay video-streaming business.

As part of the agreement, Fubo asked the federal district court on Monday to dismiss its lawsuit against Venu, the sports streaming service planned by Disney, Fox and Warner Bros Discovery. The companies will pay Fubo $220 million in cash, with Disney also committing to a $145 million term loan for Fubo in 2026.

FuboTV had sued the big media companies last February, saying Venu would violate U.S. antitrust law by reducing competition and driving up prices. A district court judge had found Fubo was likely to succeed in its antitrust claims and issued the injunction temporarily barring Venu’s launch.

“Disney’s tie-up with Fubo looks like a way of resolving a legal spat as part of its efforts to get a sports venture with Fox and Warner Bros off the ground,” said Dan Coatsworth, an investment analyst with AJ Bell. “It’s a step forward but there are still more hurdles to clear to get the Venu Sports service operational.”

Disney and its partners in Venu Sports were scheduled to appear in the U.S. Court of Appeals Monday, to ask the court to reverse a ruling that blocked the launch of the sports streaming service.

Shares of Fubo, which had a market value of about $480 million as of last close, surged nearly 141% to $3.46 in early trading. Disney was up marginally.

Fubo’s shares tanked more than 60% in 2024, as the company’s revenue growth slowed and competition intensified from bigger rivals.

As part of Monday’s announcement, Disney will also enter into a new licensing agreement that will allow Fubo to create a sports-focused service featuring Disney’s sports and broadcast networks including ABC, ESPN, as well as ESPN+.

Gandler told investors this new agreement with Disney advances Fubo’s long-held goal “to deliver flexible, innovative and competitive content packages to consumers, particularly around sports.”

Fubo and Hulu + Live TV will continue to be available to consumers as separate offerings after the deal is closed, with Fubo focused on sports and news and Hulu + Live TV as an entertainment-focused cable replacement service.