The Walt Disney Co. will merge its streaming multichannel video service Hulu with Live TV with its competitor Fubo in a surprise deal that will shake up the streaming TV business, the companies said Monday.
The new company will continue to be traded publicly under the Fubo name, however Disney will control 70% and appoint a majority of the board. Fubo management, including co-founder and CEO David Gandler, will run the combined venture.
The deal will do a couple of big things if and when it is completed: For starters, it will create a much bigger player in the virtual multichannel video provider (vMVPD) space, one that can more aggressively take on the market leader YouTube TV. YouTube TV said a year ago that it had 8 million subscribers, while Hulu + Live TV had 4.6 million subscribers and Fubo had 1.6 million subscribers, giving a combined offering 6.2 million subs.
After the deal closes, the company will continue to offer both Hulu + Live TV and Fubo under distinct brands, with Hulu continuing to be available in the larger Disney bundle. Fubo will negotiate carriage deals on behalf of the services, independent from Disney.
Notably, the deal will also end Fubo’s legal action against the Venu sports streaming service, potentially allowing it to proceed. Venu is the skinny streaming bundle that includes Disney’s ESPN channels and ABC, Fox and Fox Sports 1, and the sports channels from Warner Bros. Discovery.
Fubo sued and secured an injunction pending the trial, putting the service on ice for the entire NFL season.
According to the companies, Disney, Fox and WBD will pay Fubo $220 million, with Disney also providing a $145 million term loan through 2026. Fubo would also receive a $130 million termination fee if the deal fails to close under certain circumstances.
The deal does not include the core Hulu SVOD service, and is focused only on the vMVPD offering. It is expected to be announced officially on Monday.
Bloomberg first reported news of the talks.
