Disney announced a deal with pay-TV streaming provider Fubo to combine Hulu + Live TV with Fubo’s operations in a joint venture. Under the deal, Fubo will drop its antitrust lawsuit seeking to derail Venu Sports, the sports-focused streaming package from Disney, Fox Corp. and Warner Bros. Discovery.
The Hulu subscription video-on-demand service is not part of the Fubo deal and will remain separate. Fubo and Hulu + Live TV will have a combined 6.2 million North American subscribers, behind Google’s YouTube TV, which nearly a year ago reported having more than 8 million customers.
Disney will own 70% of the pay-TV joint venture and Fubo will hold the remaining 30%. The Hulu + Live TV and Fubo brands will remain separately marketed and sold. The companies said the JV will negotiate carriage agreements with content providers for both Hulu + Live TV and Fubo services independently from Disney.
Also under the deal, Fubo will create a new “sports and broadcasting service,” featuring Disney’s sports and broadcast networks. Disney is entering into a new carriage agreement with Fubo for the new tier that will feature networks including ABC, ESPN, ESPN2, ESPNU, SECN, ACCN and ESPNews as well as ESPN+.
In connection with the deal, Disney, Fox and Warner Bros. Discovery will make a 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.
Furthermore, a deal-breakup 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 in the agreement.
Disney and Fubo expect the deal to close within 12-18 months.
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“This combination will allow both Hulu + Live TV and Fubo to enhance and expand their virtual MVPD [multichannel video programming distributor] offerings and provide consumers with even more choice and flexibility,” Justin Warbrooke, executive VP and head of corporate development for Disney, said in a statement. “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.”
Fubo’s existing management team, led by co-founder and CEO David Gandler, will operate the newly combined Fubo and Hulu + Live TV joint venture. The new Fubo/Hulu + Live TV joint venture will be governed by a board of directors with the majority appointed by Disney; Gandler also will serve on the board. The deal will provide the combined company with “the resources and support of Disney,” according to the companies’ joint announcement.
The combination of Fubo and Hulu + Live TV “enables us to deliver on our promise to provide consumers with greater choice and flexibility,” Gandler said in a statement. “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.”
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In February 2024, Fubo filed a federal antitrust lawsuit against Disney, Fox and Warner Bros. Discovery seeking to block the launch of Venu, alleging that the companies (together with Disney’s ESPN and Hulu) have “engaged in a years-long campaign to block Fubo’s innovative sports-first streaming business resulting in significant harm to both Fubo and consumers.” Last summer, Fubo won a preliminary injunction halting the three companies’ launch of Venu.