A strange twist on Monday has major implications for the streaming world on several fronts. Virtual multichannel programming distributor Fubo, which went to court against Disney, Warner Bros. Discovery, and Fox last year to stop their joint Venu Sports streaming service (and was able to do so, at least for the time being), now has struck an agreement to merge with Disney’s Hulu+Live TV in a deal that gives Disney majority control of the new service and also settles Fubo’s lawsuit against all three companies.
The move, if it receives regulatory approval, would mean there’s one less virtual multichannel programming distributor (vMVPD) ownership group out there. However, both Fubo and Hulu+Live TV will continue to be available to consumers, at least in the immediate post-closing period. It also means the current Venu litigation looks to have wrapped up, but it’s unclear what specifically that will mean for that joint venture. Other MVPDs objected to Venu as well, so one of them could step into Fubo’s shoes to challenge it. And Venu may be less important for Disney and ESPN, in particular, to pursue now that they’re closer to the fall 2025 launch of their own Flagship streaming product.
There are many notable elements here regarding what this means for Fubo, Hulu+Live TV, and vMVPD offerings. The deal would combine Fubo and Hulu+Live TV, with Fubo’s existing executive team (led by CEO and co-founder David Gandler) leading the new service, but Disney owns around 70 percent of the combined business. It would also see a new Disney-Fubo carriage agreement and a new “Sports & Broadcast” service launched by this new business, which will feature networks including ABC, ESPN, ESPN2, ESPNU, SECN, ACCN, and ESPNEWS, plus streaming service ESPN+.
Just how that package will differ from ESPN’s eventual Flagship service also remains to be seen.
This went from not being on the public radar to being a done deal very quickly. Bloomberg’s Michelle F. Davis, Lucas Shaw, and Christopher Palmeri reported at 7 a.m. ET Monday morning that a deal was near. Less than two hours after that, Fubo and Disney then officially confirmed that with a joint press release outlining the details. Some further notable elements are the discussions of the payments (which are from Fox and WBD as well) and the settlement of that litigation.
Per the release:
In conjunction with the Transaction, Fubo has settled all litigation with Disney and ESPN related to Venu Sports, the previously announced sports streaming platform planned by ESPN, FOX and Warner Bros. Discovery. Fubo has also settled all litigation with FOX and Warner Bros. Discovery.
In connection therewith, at signing of the Transaction, Disney, FOX and Warner Bros. Discovery will make an aggregate cash payment to Fubo of $220 million.
In addition, Disney has committed to provide a $145 million term loan to Fubo in 2026 as part of the Transaction.
Additionally, a termination fee of $130 million will be payable to Fubo under certain circumstances, including if the Transaction fails to close due to the failure to obtain requisite regulatory approvals on the terms and conditions set forth in the definitive agreement.
There had been plenty of previous conversations about Fubo’s cash situation, with that company reporting a $54 million loss for the third quarter last fall and taking a stock hit around that. They had repeatedly said they’d be profitable in 2025 if Venu wasn’t allowed to launch (and would go under if it wasn’t), but there were skeptics on how well their business would work even without Venu in the way. The move here should at least provide some future for the company (albeit in a new, Disney-controlled state); they get a $220 million cash payment from the three companies at the signing here, they set up a loan in 2026, and they get a termination fee if this doesn’t land regulatory approval. But, if the move does go through, it means the end of independent Fubo.
While the announcement here spells out a lot of the details, it’s far from the end of the story. As mentioned, Fubo was far from the only objector to Venu, so we’ll see if another MVPD decides to try and sue over it. It also remains to be seen what level of regulatory scrutiny this plan receives; the Department of Justice weighed in on Fubo’s side in the Venu case, citing antitrust concerns, and the DOJ has been very active in regulating moves in this space (including forcing Disney to sell the Fox regional sports networks, now FanDuel Sports Networks, as part of the Disney-Fox deal).
But there are likely changes inbound with the DOJ and the FCC with President-Elect Donald Trump set to be inaugurated on Jan. 20. So that could impact this as well, as could the level of opposition this deal does or doesn’t receive from other MVPDs. There will be a lot to watch here, and how well this deal does or doesn’t go may have major implications for a lot of the TV universe.
