FuboTV on TV hosted in New York, USA, Wednesday, February 21, 2024.
Gabby Jones | Bloomberg | Getty Images
Disney will combine its Hulu+ Live TV service with Fubocombining two Internet TV packages, the companies announced on Monday.
Disney will become the majority owner of the resulting company – publicly traded Fubo – with 70% of the shares. Fubo shareholders will own the remaining 30% of the company.
Both Hulu+ Live TV and Fubo are streaming services that mimic a traditional cable TV package, offering linear TV networks. Collectively, the streaming services have 6.2 million subscribers.
Both services will continue to be available separately to consumers after the deal closes. Hulu+ Live TV can be streamed through the Hulu app and is also part of the Disney bundle that also includes Hulu, Disney+ and ESPN+.
The deal does not include streamer Hulu, known for creating original content like “Only Murders in the Building” and “The Handmaid's Tale,” which competes with platforms like Netflix.
Fubo's stock, which closed at just $1.44 a share on Friday, rose as much as 170% in early Monday trading before giving up some gains.
“Upon closing of the transaction, our company is expected to be immediately cash flow positive, which will immediately make Fubo a major player in the streaming space,” Fubo co-founder and CEO David Gandler said during a call with investors on Monday.
Fubo shares soar after deal with Disney.
Specifically, as part of the deal, Fubo and Disney settled litigation involving Venu, a proposed sports streaming service offered by Disney, Fox and Warner Bros. Discovery.
Fubo filed a lawsuit against Disney, Fox and WBD claiming the service would be anti-competitive, and last year a US judge temporarily blocked Venu launch.
Following the signing of the Disney-Fubo deal, Disney, Fox and Warner Bros. Together, Discovery will pay Fubo $220 million in cash. Disney will additionally provide Fubo with a $145 million term loan in 2026. If the deal fails, Fubo will receive a $130 million termination fee.
The combined company will be led by Fubo's management team, including Gandler, and the new board will be largely appointed by Disney.
On Monday, the companies also announced that Fubo and Disney have entered into a new carriage agreement that allows Fubo to create a new sports and broadcasting service that includes Disney networks.
Bloomberg reported on Monday, a deal to combine live TV streaming services was imminent.
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