Born out of the ashes of a legal fight and built after cord-cutting already shaved down the Pay TV landscape, Disney and Fubo have closed a deal that will create a notable player in the live channel streaming business.
The surprise early January merger agreement between Hulu + Live TV’s business and Fubo has formally closed on Wednesday, the companies said. The deal gives heft to the player in the wonkily-titled virtual multichannel video programming distributor (vMVPD) space — with 6 million subscribers it can tout itself as a rival to YouTube TV, which is a leader with around 10 million subs. Both streamers will also stay as standalone offerings to consumers.
“Since Fubo’s founding a decade ago, our vision has always been to build a consumer-first streaming platform defined by innovation and value,” said David Gandler, co-founder and CEO of Fubo. “Together with Disney, we’re creating a more flexible streaming ecosystem that gives consumers greater choice, while driving profitability and sustainable growth.”
Disney now holds a 70 percent stake in the business, with Fubo shareholders owning 30 percent of the vMVPD service. The combined company will include a raft of Disney executives on the board, including Debra OConnell, Cathleen Taff, Jim Lygopoulos and Justin Warbrooke. Fubo’s Gandler will lead the merged operations of Fubo and Hulu + Live TV.
The road to the merger included a pit stop at a failed launch of a streaming sports service from Disney, Fox Corp and Warner Bros. Discovery titled Venu (R.I.P.), which was scuttled after a judge denied a bid to dismiss a lawsuit from Fubo, which sued on anticompetitive business grounds.
After the lawsuit was settled, which included Fubo being paid $220 million by Disney-Fox-Warners, execs turned to dealmaking and the Live + TV side of Hulu was seen as an appealing bargaining chip. Hulu’s primary business, which has 55.5 million subscribers, is staying entirely with Disney. As of the Bob Iger-run company’s latest earnings report in August, Hulu Live + TV had 4.3 million subs, meaning Fubo is bringing about 1.7 million subscribers into the fold with the deal close.
As part of the merger, former Disney international exec Andy Bird is joining the board as independent chairman. “It is a privilege to join Fubo as Chairman at such a transformative time for the company,” stated Bird. “Today’s announcement brings together two industry leading brands and a compelling set of resources that uniquely position us to meet the evolving needs of today’s consumer.”
