Photo credit: www.cnbc.com
Disney and FuboTV to Merge Streaming Services
Disney has announced plans to merge its Hulu+ Live TV service with Fubo, creating a new entity that will combine two popular internet TV platforms. The agreement, disclosed on Monday, will see Disney acquire a 70% majority stake in the merged company, while Fubo shareholders will retain the remaining 30% ownership.
Both Hulu+ Live TV and Fubo are known for their streaming services that closely resemble traditional cable packages, featuring a variety of linear television channels. Collectively, the two services boast a subscriber base of approximately 6.2 million viewers.
Importantly, consumers will continue to have access to both services independently after the merger is finalized. The Hulu+ Live TV service will remain available through the Hulu app and as part of Disney’s broader bundle, which includes Hulu, Disney+, and ESPN+.
It is worth noting that this merger does not encompass the Hulu platform, which is recognized for its original programming, such as “Only Murders in the Building” and “The Handmaid’s Tale,” and competes with other streaming services like Netflix.
Following the announcement, shares of Fubo experienced a significant rally, rising as much as 170% in early trading on Monday after closing the previous Friday at just $1.44 per share.
David Gandler, co-founder and CEO of Fubo, expressed optimism during a call with investors, stating, “At deal close, our company is expected to become immediately cash flow positive, instantly making Fubo the major player in the streaming space.”
In a significant aspect of the agreement, both Fubo and Disney have resolved ongoing litigation related to Venu, a proposed sports streaming service developed by Disney, Fox, and Warner Bros. Discovery. Fubo previously filed a lawsuit claiming that the service would be anti-competitive, and a U.S. judge had momentarily halted its launch last year.
As part of the settlement, the trio of companies will provide Fubo a cash payment of $220 million upon finalizing the merger. Additionally, Disney will extend a $145 million term loan to Fubo in 2026. Should the merger not proceed, Fubo is entitled to a termination fee of $130 million.
The management of the newly formed entity will continue to be overseen by Fubo’s current leadership, including Gandler, while the board of directors will primarily be appointed by Disney.
On the same day, both companies announced a new carriage agreement, enabling Fubo to develop a fresh sports and broadcasting offering that includes Disney’s networks.
Earlier reports from Bloomberg indicated that a deal to merge the live TV streaming services was approaching conclusion.
This is breaking news. Please check back for updates.
Source
www.cnbc.com