Why Disney’s major deal with Fubo is more than a sports streaming legal battle
The Mouse House is expanding, with Disney combining its Hulu + Live TV business with Fubo, but the streaming television The deal could go beyond simply settling a legal battle over Venu Sports.
Today, Disney announced its agreement to combine its Hulu + Live TV business with Fubo, creating a combined virtual multichannel video programming distribution (MVPD) company. With this deal, Disney becomes the majority shareholder of the resulting company, controlling 70% of Fubo. This new combined business operates under Fubo’s existing management team and under the Fubo name, and Fubo and Hulu + Live TV will continue to be available to consumers as separate offerings.
As a result of the deal, Fubo will create a new sports and streaming service featuring Disney’s sports and streaming networks. The combined company will have 6.2 million North American subscribers, making it the second largest all-digital TV service after YouTubeTV’s 8 million.
Notably, Fubo had been engaged in a legal battle against Disney, Fox and Warner Bros. Discovery regarding the launch of their proposed combined MVPD, Venu Sports, which Fubo claimed was anti-competitive. Now all disputes between the companies have been resolved.
According to a Disney statementUpon closing of the transaction, Disney, Fox and WBD will make a global cash payment of $220 million to Fubo. Additionally, Disney agreed to provide a $145 million term loan to Fubo in 2026 as part of the transaction.
Following the announcement of the agreement, Fubo shares jumped 200%according to reports.
“Fubo got concessions in its lawsuit indirectly,” Ross Benes, senior analyst at eMarketer, told ADWEEK. “Going after Venu contributed to a merger with Hulu.”
Disney, Fox and WBD originally planned to launch Venu last year, but Fubo’s trial halted those plans. With the lawsuit dropped, Venu has a seemingly smooth runway for a launch, and Fubo should serve as Venu Sports reselleraccording to report from The Desk.
Venu Sports did not immediately respond to a request for comment.
What happens next
In an ever-changing TV landscape, analysts told ADWEEK there’s a lot more going on than just legal issues being resolved.
“Running a virtual cable service has proven to be unprofitable, even for the most successful products,” Benes said. “The elimination of vMVPDs started with Playstation Vue and will continue.”
Benes noted that Hulu’s Live TV offering started under different ownership. (Disney reached an $8.6 billion deal with Comcast in 2023 to fully acquire Hulu.) Now, this new agreement allows Disney to further offload its role as a pay television operator.
“Disney may be the majority shareholder in this new entity, but the fact that it is publicly traded under the name “Fubo” and managed by Fubo management makes it seem like they will eventually consider spinning off. get rid of their pay TV operator assets,” Benes said.
Whether or not Disney ends up getting rid of Fubo, 2025 is only days away, so more consolidations and mergers are certainly on the way, experts say.
“The consolidation of cable networks and the rise of new consumer packages will take center stage in 2025,” Matt Sweeney, chief investment officer of GroupM US, recently told ADWEEK when reflecting on the situation. topics that will dominate the television industry this year. “Expect streamlined packages combining must-have content: sports, reality TV, scripted shows and premium on-demand options.”
And as more deals are made with online TV, consumer confusion will ensue, according to Mike Proulx, vice president and research director at Forrester.
“The rise of virtual MVPDs as an alternative (and eventual replacement) to cable and satellite television appears at odds with major streaming services like Netflix and Prime Video aggressively negotiating over-the-air programming deals,” Proulx said. “All of this means higher overall costs for consumers as they bundle their television programs piecemeal in what seems like a never-ending game of whack-a-mole.”
