FuboTV Inc. (FUBO) and Disney Announce Merger of Hulu + Live TV and Fubo to Form New Streaming Powerhouse

FuboTV Inc. (NYSE: FUBO) and The Walt Disney Company (DIS) have entered into a definitive agreement to combine their streaming operations, merging Hulu + Live TV with Fubo. The move aims to enhance consumer choice by offering an expanded array of programming packages, marking a significant shakeup in the competitive landscape of virtual Multichannel Video Programming Distributors (MVPDs). The transaction is subject to regulatory approvals, Fubo shareholder approval, and the fulfillment of customary closing conditions.

Key Terms of the Deal

Under the terms of the agreement, Disney will acquire a 70% stake in the newly combined entity. Fubo’s existing management team, led by Co-founder and CEO David Gandler, will oversee the operations of the unified business. The merger will bring together two leading services in the virtual MVPD sector, providing customers with even more options for streaming live broadcast and cable television content.

Gandler expressed enthusiasm about the collaboration: "We are thrilled to collaborate with Disney to create a consumer-first streaming company that combines the strengths of the Fubo and Hulu + Live TV brands," he said. "This combination enables us to deliver on our promise to provide consumers with greater choice and flexibility. Additionally, it strengthens Fubo’s balance sheet and positions us for positive cash flow.”

Expanding Programming Offerings for Subscribers

The merger will significantly expand the content offerings available to subscribers. Disney’s involvement will allow the combined entity to create a new Sports & Broadcast service, featuring Disney’s flagship networks such as ESPN, ESPN2, ESPN+, ABC, and more. This new service will allow Fubo to increase its sports and broadcast options, while continuing to offer a wide array of live sports events, including over 55,000 annually.

Fubo and Hulu + Live TV will remain available as separate offerings. Hulu + Live TV, with its strong entertainment programming, will continue to be available via the Hulu app, bundled with other Disney services like Hulu, Disney+, and ESPN+. Meanwhile, Fubo will maintain its app, focusing on its renowned sports coverage, which has made it a go-to service for live sports fans.

A Boost for Fubo and Hulu + Live TV Subscribers

The combination of the two services will provide over 6.2 million subscribers in North America with greater flexibility in choosing their programming packages, catering to a wide range of consumer preferences at competitive price points. With the combined strength of both brands, the services are expected to drive innovation, expand content options, and unlock new sales and marketing opportunities.

“We have confidence in the Fubo management team and their ability to grow the business,” said Justin Warbrooke, Executive Vice President and Head of Corporate Development at Disney. “This partnership will deliver high-quality offerings that serve subscribers with the content they want and offer great value.”

Strategic Synergies and Financial Benefits

The merger is designed to generate significant synergies. By creating more flexible programming packages, the combined company will be able to cater to various audience segments, offering more innovative solutions to its subscribers. The transaction is expected to result in an immediately capitalized and cash-flow-positive business post-closing, with strong growth potential.

In addition to the merger’s operational benefits, Fubo will also settle ongoing litigation with Disney and ESPN related to their previous sports streaming platform venture. As part of the transaction, Disney, FOX, and Warner Bros. Discovery will collectively make a $220 million cash payment to Fubo, further strengthening its financial position.

Looking Ahead

As part of the transaction, Fubo will be governed by a new board of directors, with a majority appointed by Disney. Gandler will continue to serve as Fubo's CEO and will also hold a seat on the board. The deal also includes a $145 million term loan from Disney to Fubo, which will mature in 2026. Additionally, Fubo will receive a $130 million termination fee under certain conditions, should the deal fail to close due to regulatory hurdles.

With the deal expected to close in the coming months, this merger represents a strategic step for both companies to expand their footprint in the increasingly crowded streaming market.

Conclusion

The combination of Fubo and Hulu + Live TV will reshape the virtual MVPD landscape, offering consumers a broader and more flexible selection of live programming. With the backing of Disney, the newly formed company is poised to redefine streaming for both entertainment and sports fans, while delivering long-term benefits to shareholders.