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By Reuters
January 6, 2025 – 6:55 AM PST
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Walt Disney Co (DIS.N) said on Monday it would merge its Hulu + Live TV business with smaller rival FuboTV (FUBO.N) in a deal that also potentially clears the way for the launch of its sports streaming venture with Fox Corp and Warner Bros Discovery.
The combination creates the second-biggest internet pay-TV company in North America, behind YouTube TV, with around $6 billion in revenue and 6.2 million subscribers.
Disney will hold a 70% majority stake in the venture, which will be led by Fubo CEO and co-founder David Gandler. The deal excludes Hulu’s mainstay video-streaming business.
As part of the agreement, Fubo will also drop its lawsuit against Venu, the sports streaming service planned by Disney, Fox, and Warner Bros Discovery. The companies will pay Fubo $220 million in cash, with Disney also committing to a $145 million term loan for Fubo in 2026.
FuboTV had sued the big media companies last February, saying Venu would violate U.S. antitrust law by reducing competition and driving up prices. A district court judge had found Fubo was likely to succeed in its antitrust claims and issued the injunction temporarily barring Venu’s launch.
“All litigation between Fubo and Disney has been settled,” the companies said on Monday.
Shares of Fubo, which had a market value of about $480 million as of last close, surged nearly 141% to $3.46 in early trading. Disney was up marginally.
Fubo’s shares tanked more than 60% in 2024, as the company’s revenue growth slowed and competition intensified from bigger rivals.
As part of Monday’s announcement, Disney will also enter into a new carriage agreement with Fubo that will allow Fubo to create a new sports service featuring Disney’s sports and broadcast networks including ABC, ESPN, as well as ESPN+.
Fubo and Hulu + Live TV will continue to be available to consumers as separate offerings after the deal is closed.
The deal includes a termination fee of $130 million.
Reporting by Deborah Sophia in Bengaluru; Editing by Shilpi Majumdar and Shinjini Ganguli
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