disney Integrates with Hulu+ Live TV service. Prefectural securityare merging two Internet TV bundles, the companies announced Monday.
Disney will become majority owner of the resulting publicly traded company, Fubo, with a 70% stake. Fubo shareholders will own the remaining 30% of the company. The deal is expected to close within 12 to 18 months.
Hulu+ Live TV and Fubo are both streaming services that mimic traditional cable TV bundles and offer linear TV networks. Together, the streaming services have 6.2 million subscribers.
Even after the contract is completed, consumers will be able to use both services separately. Hulu+ Live TV can be streamed through the Hulu app as well as part of Disney’s bundle, which includes Hulu, Disney+, and ESPN+.
The deal does not include Hulu, the streamer known for producing original content that competes with the platform, such as “Only Murders in the Building” and “The Handmaid’s Tale.” Netflix.
“We are now stewards of an iconic brand with Hulu,” Fubo co-founder and CEO David Gandler said on a conference call with investors on Monday. He added that Hulu+ Live TV’s inclusion within the Hulu ecosystem will add value in the form of user retention.
“Having two different platforms right now is obviously not ideal,” Gandler said during the call. “We believe there are synergies on the back end. … But at this point, we want to give consumers choice.”
Gandler said that while Fubo has long focused on providing sports and news, Hulu+ Live TV is also known for providing entertainment.
Fubo is expected to become cash flow positive soon after the transaction closes, and “immediately Fubo will become a major player in the streaming space,” Gandler said on Monday’s conference call.
The stock closed Friday at just $1.44 per share, but rose 250% on Monday.
Fubo stock soars after the deal with Disney.
Notably, under this agreement, Fubo and Disney settled a lawsuit involving Disney, Fox, and Disney’s proposed sports streaming service Venu. warner bros discovery.
Fubo has filed lawsuits against Disney, Fox, and WBD, alleging the service is anti-competitive, and a U.S. judge last year temporarily blocked Venu’s launch.
Once the Disney-Fuvo deal is finalized, Disney, Fox and Warner Bros. Discovery will jointly pay Fuvo $220 million in cash. Disney will also commit to a $145 million term loan to Fubo in 2026. If the deal falls through, Fubo will receive a termination fee of $130 million.
The combined company will be led by Fubo’s management team, including Mr. Gandler, but a majority of the new board will be appointed by Disney.
Bloomberg reported early Monday that a deal to integrate live TV streaming services is imminent.
focus on sports
Fubo had 1.6 million subscribers in North America before being combined with Hulu+ Live TV and competes with other similar bundle platforms including: Google youtube tv.
But Fubo has long focused its bundles on providing sports and news content. The company is one of the last channels to offer a variety of regional sports networks, which host the majority of matches for local professional teams and often charge hefty fees from distributors.
As a result, Fubo removed entertainment-focused channels from its bundles, including AMC Networks channels and the Warner Bros. Discovery television network.
Fubo executives said Monday that the newly combined company’s increased size will give it more leverage in transportation discussions with other networks.
As part of the merger, the companies also announced Monday that Fuvo and Disney have entered into a new transportation agreement that will allow Fuvo to build new sports and broadcast services leveraging Disney’s network. On a conference call with investors, Fubo said he also reached a new agreement with Fox.
Fubo’s focus on sports was a key driver of its lawsuit against Venu, a sports streaming service that is a joint venture between Disney, Warner Bros. Discovery, and Fox.
Venu was scheduled to launch in time for the start of the NFL season in September and would feature a full suite of sports networks and content from the three media companies that collaborated to develop it. The app, which costs $42.99 per month, highlighted the high cost of sports TV bundles and helped avoid interference with transportation contracts.
The judge in the case noted that Disney, Fox, and WBD together control approximately 54% of all U.S. sports media rights and at least 60% of all nationally broadcast U.S. sports rights. did.
Fubo argued in its lawsuit that Venu is anticompetitive and will change its business forever. When a judge temporarily blocked Venu’s launch in August, it was a major victory for Fubo. The three media companies appealed the court’s ruling.
No plans were announced Monday, but the settlement allows Venu to move forward with the launch.
Meanwhile, Disney faces multiple challenges with ESPN’s streaming options. In addition to its current apps, ESPN+ and Venu, ESPN plans to launch its flagship direct-to-consumer streaming app later this year.
— CNBC’s Alex Sherman contributed to this article.
Disclosure: Comcast, which owns NBCUniversal, the parent company of CNBC, is a co-owner of Hulu.
