The FuboTV app on a television set up in New York, USA, on Wednesday, February 21, 2024.
Gabby Jones | Bloomberg | Getty Images
Disney will combine its Hulu+ Live TV service with Fubowhich will combine two internet TV bundles, the companies announced on Monday.
Disney will become the majority shareholder 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 and offer 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 as part of Disney's bundle that also includes Hulu, Disney+ and ESPN+.
The deal does not include 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, rose as much as 170% in early trading Monday before giving up some gains.
“Upon closing of the deal, our company is expected to immediately have positive cash flow, immediately making Fubo the premier player in streaming,” said David Gandler, co-founder and CEO of Fubo, on a call with investors on Monday.
Fubo shares rise after Disney deal.
Notably, under the deal, Fubo and Disney settled over Venu, the proposed sports streaming service from Disney, Fox and Warner Bros. Discovery.
Fubo had filed a lawsuit against Disney, Fox and WBD alleging the service was anti-competitive, and last year a US judge temporarily blocked the launch of Venu.
Once the Disney-Fubo deal is signed, Disney, Fox and Warner Bros. Discovery will jointly make a $220 million cash payment to Fubo. Disney will additionally provide a $145 million term loan to Fubo in 2026. If the deal falls through, Fubo would receive a $130 million termination fee.
The combined company will be led by Fubo's management team, including Gandler, while the new board of directors will be majority appointed by Disney.
The companies also announced Monday that Fubo and Disney have entered into a new carriage agreement, allowing Fubo to create a new sports and broadcast service with Disney's networks.
Bloomberg reported earlier on Monday that a deal to merge the live TV streaming services was imminent.
This is the latest news. Check back later for updates.