Disney’s Hulu + Live TV service and Fubo merge in surprise deal that ends Venu lawsuit

New York
CNN
—

Disney’s Hulu + Live TV service and Fubo will merge to create one of the nation’s largest pay-TV providers, the companies announced Monday in a surprise deal that will potentially allow the Venu Sports streaming service to move forward.

Under the terms of the deal, Disney will own 70% of Fubo, while the TV streaming service’s current management team will run the newly combined entities, led by Fubo co-founder and CEO David Gandler. The combined streaming-cable service will have 6.2 million subscribers, making it the second-largest streaming pay-TV provider, behind only YouTube TV.

As part of the deal, Fubo will drop its lawsuit against Venu Sports, the streaming joint venture between Disney, Fox Corp and CNN parent Warner Bros. Discovery, blocking the launch of the long-delayed service. The companies said Disney, Fox and WBD will pay Fubo $220 million, and Disney will provide a $145 million loan to Fubo through 2026.

“We are thrilled to partner with Disney to create a consumer-first streaming company that combines the strengths of the Fubo and Hulu + Live TV brands,” Gandler said. “This combination enables us to deliver on our promise to provide consumers with greater choice and flexibility.”

Shares of Fubo rose more than 200% on the news Monday morning.

The deal, which does not include the Hulu subscription service, will see Disney enter into a new carriage agreement with Fubo, allowing the company to create a new Sports & Broadcast service featuring Disney’s sports and broadcast networks, including ABC, ESPN, ESPN2 , ESPNU , SECN, ACCN, ESPNEWS and ESPN+.

Under the deal, Fubo and Hulu + Live TV will remain available to subscribers through their respective platforms, with Hulu + Live TV available on the Hulu app and remaining part of the Hulu, Disney+ and ESPN+ bundle. Fubo will also keep its app.

Last year, Fubo sued Disney, Fox Corp and WBD, blocking the trio’s joint sports streaming venture, Venu Sports, which was scheduled to launch in August 2024. A hearing in the case was scheduled for later Monday.

Set to be priced at $42.99 per month, the Venu Sports service will give cord-cutters access to a wide variety of sporting events from each of the media companies’ portfolios, including the NFL, NBA, MLB, NHL, tennis, soccer, golf, NASCAR -races and UFC fights.

While WBD has added its existing live sports offerings to its Max streaming service, Disney also plans to launch a standalone direct-to-consumer ESPN streaming service later this year.