Fubo settles Venu Sports suit, will combine with Hulu + Live TV

In a move that surprised many, The Walt Disney Company and FuboTV Inc. announced a deal that will see Hulu + Live TV merge with Fubo and allow for Venu Sports, a joint venture between Disney, Warner Bros. Discovery and Fox to move forward.

Under the new deal, Hulu + Live TV will become part of the Fubo brand, with current Fubo leadership heading up the new streamer. According to recent estimates, Hulu + Live TV and Fubo have a combined total of 6.2 million subscribers. Assuming most consumers stick around under the new model, that could put the company closer to YouTube TV’s 8 million subscriber count.

Hulu + Live TV and Fubo will both continue to be sold separately under their own names as well, with the former focusing on entertainment channels and the latter on news and sports, though the exact channel lineups have not been announced.

That said, it was made clear that ABC, ESPN, ESPN2, ESPNU, SECN, ACCN and ESPNews are all expected to join the Fubo lineup. ESPN+ will also be included.

Hulu will also continue to offer its standalone non-linear streaming service, known as simply “Hulu,” outside of the deal with Fubo. It will also continue to be bundled with Disney+, which will also remain separate from the Fubo venture. 

“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,” said Fubo co-founder and CEO David Gandler, in a statement. “This combination enables us to deliver on our promise to provide consumers with greater choice and flexibility. Additionally, this agreement allows us to scale effectively, strengthens Fubo’s balance sheet and positions us for positive cash flow. It’s a win for consumers, our shareholders, and the entire streaming industry.”

“This combination will allow both Hulu + Live TV and Fubo to enhance and expand their virtual MVPD offerings and provide consumers with even more choice and flexibility,” said Justin Warbrooke, executive vice president and head of corporate development, The Walt Disney Company. “We have confidence in the Fubo management team and their ability to grow the business, delivering high-quality offerings that serve subscribers with the content they want and offering great value.”

Under the terms of the definitive agreement, at closing, Disney will own 70% of Fubo thanks to some heavy investment in the company. Fubo’s existing management team, led by Gandler, will operate the newly combined Fubo and Hulu + Live TV businesses.

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The combined company will negotiate carriage agreements with content providers for both Hulu + Live TV and Fubo services independently from Disney.

Meanwhile, Disney, WBD and Fox, will be permitted to proceed with launching Venu Sports, a bundled streamer that will include the linear feeds of ESPN, ESPN2, ESPNU, SEC Network, ACC Network, ESPNews, ABC, Fox, FS1, FS2, Big Ten Network, TNT, TBS and truTV as well as ESPN+ content. The company earlier said it would sell this for $42.99 a month when details about the service were announced in 2024.

As part of the agreement, all of Fubo’s litgation against Disney, WBD and Fox have been settled. The three companies have agreed to an aggregate cash payment to Fubo of $220 million when the deal is signed.

Disney has also committed to provide a $145 million term loan to Fubo in 2026. 

Additionally, a termination fee of $130 million will be payable to Fubo under certain circumstances, including if the deal fails to close due to the failure to obtain requisite regulatory approvals.

Wells Fargo is serving as the lead financial advisor to Fubo and Evercore is also serving as financial advisor to Fubo. Latham & Watkins LLP is serving as legal advisor to Fubo in connection with the transaction, and Kellogg Hansen LLP represented Fubo in its antitrust litigation. Centerview Partners LLC is serving as financial advisor to The Walt Disney Company and Cravath, Swaine & Moore LLP is serving as legal advisor to The Walt Disney Company.

Attorneys for streamer Fubo told a U.S. district judge in August 2024 that the streamer “will face insolvency” if the ESPN–Warner Bros. Discovery–Fox joint venture Venu Sports launches and called on the court to take action in the form of a temporary injunction.

The Venu is also the target of concern from lawmakers, including calls for the FCC and Department of Justice to investigate the venture. DirecTV and Dish have also lent their support to Fubo in the issue.

Later in 2024, the sports mega sports streamer’s announced launch date was blocked by a judge.