Disney’s Hulu + Live TV merges with Fubo, Venu lawsuit settled
Paves way for new Disney-WBD-Fox joint venture to launch
[Editor’s Note: This article has been updated.]
In a stunning turn of events, virtual multiple video program distributor Fubo announced Monday that it agreed to terms to merge with rival Hulu + Live TV, owned by The Walt Disney Company. Just as important, it removes a key stumbling block for sports-themed Venu.
Last year, the sports-themed Fubo sued Disney to stop the launch of Venu, seeing it as a threat to its business and forcing it to carry non-sports channels its subscribers didn’t want. But Disney, the lead company in the joint venture with Fox and Warner Bros. Discovery, agreed to settle for $220 million, with all three principals paying Fubo, roughly $76.3 million each. As a result, Fubo is dropping its lawsuit against Venu, giving it the green light to launch later this year pending regulatory and shareholder approval.
The deal also means Fubo would launch a Sports and Broadcast bundle separate from Venu, featuring Disney’s sports channels including ESPN, ESPN2, ACCN, SEC Network, ESPN News, ESPN+, and ABC.
Disney and Hulu + Live TV will combine to form a new venture tentatively called NewCo, with Disney owning 70 percent and Fubo 30 percent with David Gandler serving as chief executive of the new combined company. Both will continue to operate separately as consumers would have a choice between the two. When the deal closes within twelve to eighteen months, the combined entity will have six million subscribers, more or less. Both have YouTubeTV as a major competitor in the virtual space.
Standalone streaming service Hulu isn’t part of the deal and remains wholly owned by Disney as the company bought out the stakes of previous companies AT&T, Fox, and more recently Comcast. Hulu + Live TV will remain in the Hulu app and the Disney bundle.
Fubo’s shares surged 250 percent in trading Monday after news of the merger broke. On Friday, Fubo’s stock closed at $1.44 a share.
There is hope for carriage for Chicago sports fans who subscribe to Hulu + Live TV given that Fubo carries both Marquee Sports and Chicago Sports Network, but neither is available on the other service. It’s not immediately known how the new company would negotiate carriage for the channels, or how they would be added to Hulu + Live TV.
The Fubo deal removes a hurdle in launching Venu, a proposed skinny sports bundle for $43 monthly. A federal judge last August sided with Fubo in an injunction, blocking it from launching as Venu’s bundle of channels including ESPN, TNT, and TBS could violate antitrust law. The controversy surrounding Venu became political as several Republican Attorney Generals – mostly in states where SEC football draws phenomenal ratings, filed a friend of the brief with Venu in the lawsuit. Several Democratic Attorney Generals – including Illinois AG Kwame Raoul, filed a friend of the court briefs with Fubo. The Fubo-Disney was scheduled to go to trial this October but with the suit settled, it is not going forward.
However, with a new Trump administration arriving, the chances of Venu getting derailed due to antitrust concerns are likely lower. And with support from Republicans, it’s not a matter of if but when Venu launches – and that could take place by the Super Bowl.