Disney will combine its Hulu+ Live TV service with Fubo, merging together two internet TV bundles, the companies announced on Monday.
Disney will become majority owner of the resulting company — the publicly traded Fubo company — with a 70% ownership stake. Fubo shareholders will own the remaining 30% of the company.
Both Hulu+ Live TV and Fubo are streaming services that mimic the traditional cable TV bundle, offering linear TV networks. Together the streaming services have 6.2 million subscribers.
Both services will still be available separately to consumers after the deal closes. Hulu+ Live TV can be streamed through the Hulu app, as well as part of Disney’s bundle that also includes Hulu, Disney+ and ESPN+.
The deal doesn’t include the 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 stock, which closed Friday at just $1.44 per share, surged as much as 170% in early trading Monday before paring some gains.
“At deal close, our company is expected to become immediately cash flow positive, instantly making Fubo the major player in the streaming space,” said Fubo co-founder and CEO David Gandler during a Monday call with investors.
Notably under the deal, Fubo and Disney have settled litigation regarding Venu, the proposed sports streaming service from Disney, Fox and Warner Bros. Discovery.
Fubo had brought a lawsuit against Disney, Fox and WBD alleging the service would be anticompetitive, and last year a U.S. judge temporarily blocked the launch of Venu.
When the Disney-Fubo deal is signed, Disney, Fox and Warner Bros. Discovery will together make a $220 million cash payment to Fubo. Disney will additionally commit a $145 million term loan to Fubo in 2026. If the deal were to fall through, Fubo would receive a $130 million termination fee.
The combined company will be led by Fubo’s management team including Gandler, while its new board of directors will be majority appointed by Disney.
The companies also announced Monday that Fubo and Disney entered into a new carriage agreement which allows for Fubo to create a new sports and broadcasting service that features Disney’s networks.
Bloomberg reported earlier on Monday a deal to merge the live TV streaming services was imminent.
This is a developing story. Please check back for updates.
