FuboTV Inc. (NYSE:FUBO) shares skyrocketed Monday after the company partnered with The Walt Disney Company (NYSE:DIS), has completed a definitive agreement to combine Disney’s Hulu + Live TV with Fubo, creating a combined virtual MVPD company.
The combined entity will have a majority stake in Disney, which will own 70% of the company, with Fubo continuing to operate under the leadership of CEO David Gandler.
Following the completion of the transaction, Fubo will be governed by a board, the majority of which will be appointed by Disney. The combined company is expected to have positive cash flow immediately following closing.
The strategic partnership aims to provide consumers with more choices in live TV streaming services. Together, Fubo and Hulu + Live TV will provide more than 6.2 million subscribers in North America with access to an extensive range of live TV channels, including sports and entertainment programming.
Both Hulu + Live TV and Fubo remain available as separate offerings. Hulu + Live TV continues to stream in the Hulu app and is offered as part of the bundle with Hulu, Disney+ and ESPN+.
Fubo, which streams more than 55,000 live sporting events annually, will continue to serve its subscribers in the Fubo app.
The deal is still pending regulatory approval, Fubo shareholder approval and other customary closing conditions.
In connection with the transaction, Disney will enter into a new carriage agreement that will enable Fubo to create a new sports and broadcast service, with Disney’s sports and broadcast networks including ABC, ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, as well as ESPN+.
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Dispute settlement: In conjunction with the deal, Fubo has settled all related disputes with Disney and ESPN Venu Sportsthe previously announced sports streaming platform planned by ESPN, FOX and Warner Bros. Discovery.
Last year, the trio had agreed to form a new joint venture to build a new sports streaming platform called Venu, which would be made available directly to consumers through a new app.
Fubo filed a lawsuit in February, alleging that larger media companies are using their control over key sports rights to unfairly dominate their competitors.
As part of the settlement, Fubo will receive a cash payment of $220 million from Disney, FOX and Warner Bros. Discovery, in addition to a $145 million loan commitment from Disney through 2026. The agreement includes a $130 million termination fee under certain conditions.
The sports-first live TV streaming platform’s revenue grew 20.1% year over year to $386.21 million in the third quarter, beating analysts’ consensus estimate of $376.77 million.
