Walt Disney Company (DIS) and sports streaming platform FuboTV have announced a significant merger deal, combining certain operations of Disney into Fubo. The agreement, unveiled on Monday, led to a decrease in DIS stock while Fubo’s stock surged.
Under the terms of the merger, Disney will merge its Hulu + Live TV operations with Fubo, subsequently owning 70% of the new entity. Fubo will continue to operate as a publicly traded company under its own brand, with the current management team, including CEO David Gandler, remaining in charge.
Together, Hulu + Live TV and Fubo share a substantial subscriber base of 6.2 million in North America. Fubo aims to develop a new sports and broadcasting service that will integrate Disney’s networks, encompassing ABC, SECN, ACCN, and various ESPN channels. Specific details regarding the launch date and pricing for the new service have not yet been disclosed.
Importantly, both Hulu + Live TV and Fubo will still be accessible to users as distinct offerings, and Disney’s bundle that includes Hulu, Disney+, and ESPN+ will remain operational.
While the exact financial terms of the merger were not detailed, it was noted that Fubo has resolved prior litigation with Disney and ESPN related to a proposed streaming platform known as Venu Sports, which was initially set to launch in the fall of 2024. A federal ruling had previously prevented this launch on antitrust grounds, following a lawsuit filed by FuboTV. Disney, Fox, and Warner Bros. intend to appeal this decision.
As part of the merger, Disney, Fox, and Warner Bros. will pay Fubo a total of $220 million in cash, with Disney providing an additional $145 million loan to Fubo in 2026. The deal also includes a $130 million termination fee, indicating the serious commitments involved should the merger not be finalized or face regulatory hurdles.
Though DIS stock dipped slightly after an earlier gain, it is worth noting that shares have consistently remained within a favorable trading range. Conversely, FUBO stock experienced an incredible 251% surge, marking a high not seen since September 2022.
This merger marks an exciting evolution in the streaming landscape, suggesting a promising future for Fubo as it expands its offerings and subscriber base. It could pave the way for innovative sports broadcasting opportunities, enhancing the viewing experience for sports fans across North America.