Litigation between Fubo, Disney, Fox and WBD linked to the proposed Venu sports streaming service has been settled amid a transaction that will combine Fubo with Hulu + Live TV.
Venu Sports, the proposed skinny sports TV bundle from Disney, Warner Bros. Discovery (WBD) and Fox, may see the light of day yet.
That possibility emerged Monday after Disney agreed to combine its Hulu + Live TV business with Fubo, the sports-focused virtual multichannel video programming distributor (vMVPD) that has been fighting against the potential launch of Venu on antitrust grounds.
Plans to launch Venu were put on ice after a New York district judge approved a preliminary injunction against the proposed sports streaming service, holding that Venu would "substantially lessen competition and restrain trade." Venu's joint venture partners appealed the court's decision.
Under terms of the agreement announced Monday, Fubo has amended carriage agreements with Disney and Fox. That will enable Fubo to create a new Sports & Broadcasting package that will feature Disney and Fox networks (including ABC, ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS), as well as the ESPN+ premium streaming sports service.
Fubo shares soared on the news – the stock was up $1.74 (+121.60%) to $3.18 each in Monday morning trading.
Venu-related litigation settled
Tied in, all litigation between Fubo, Disney, Fox and WBD has been settled, the companies said.
Disney, Fox and WBD said they will make an aggregate cash payment to Fubo of $220 million, with Disney committing to provide a $145 million term loan to Fubo in 2026 as part of the transaction. Fubo will receive a termination fee of $130 million if the transaction fails to obtain regulatory approval on the current terms of the agreement.
The settlement could clear the way for Disney, Fox and WBD to again pursue the launch of Venu, a service that was slated to start at $42.99 per month for a lineup of more than a dozen channels (ABC, ESPN, ESPN2, SEC Network, ACC Network, ESPNEWS, Fox, FS1, FS2, Big Ten Network, TNT, TBS and truTV) and ESPN+.
The announcement didn't address the future of Venu specifically, but "launching Venu is the plan," a person familiar with the agreement told Light Reading. The person added that Disney continues to prioritize the anticipated fall 2025 launch of the flagship ESPN streaming service.
Disney and Fubo said the transaction announced Monday "will enhance consumer choice by making available a broad set of programming offerings" and "address a variety of consumer preferences at attractive price points."
In addition to regulatory approvals, the proposed deal is also subject to Fubo shareholder approval.
Fubo management to lead combined company
If the deal goes through, Disney will become the majority owner of the resulting company, which will operate under the Fubo publicly traded name and be led by Fubo's existing management team, including Fubo CEO and co-founder David Gandler. Disney will own 70% of the new company, and the rest by Fubo, according to Bloomberg.
The combined company will also negotiate carriage agreements with content providers for both Hulu + Live TV and Fubo services independently from Disney.
However, Fubo and Hulu + Live TV will continue to be sold separately. Hulu + Live TV will continue to be streamed via the Hulu app and be available in a bundle with Disney+ and ESPN+. Hulu's subscription video-on-demand (SVoD) service is not part of the Fubo agreement.
Fubo and Hulu + Live TV have a combined 6.2 million North American subscribers. Hulu + Live TV ended Disney's fiscal Q4 2024 with about 4.6 million subscribers while Fubo ended Q3 2024 with 1.61 million paid subs.
"This combination enables us to deliver on our promise to provide consumers with greater choice and flexibility," Gandler said in a statement.
ACA Connects still seeks a sports skinny bundle
In response to today's announcement, ACA Connects President and CEO Grant Spellmeyer reiterated a position that he'd like to see his membership, largely made up of tier 1 and 2 cable operators and telcos, have a shot at getting access to the kind of skinny sports package that Venu envisions.
"As ACA Connects said from the get-go, the original VENU offering was anticompetitive. This was confirmed when it was rightfully blocked by the courts," Spellmeyer said in a statement. "This settlement confirmed it since Fubo is now getting what Venu's owners themselves are getting. Our position remains the same: our Members also want the deal Venu's owners are offering themselves. They want to offer their customers the programming in bundles they want at prices they can afford."
Meanwhile, some industry watchers don't expect the proposed transaction to be transformative for the pay-TV sector, which has seen YouTube TV establish itself as the top virtual MVPD.
"We don't see this changing the competitive environment for video. Hulu + Live TV subscriber growth has stalled and YouTube TV has become the dominant vMVPD," KeyBanc analyst Brandon Nispel said Monday in a research note.
Nispel also questioned whether Disney has interest in retaining Hulu as a separate brand, finding it "likely" that Disney+ will fully integrate Hulu at some point.
MoffettNathanson analyst Robert Fishman speculated in an emailed research note that the new company might have bigger M&A implications and be merely "step one of a larger plan."
"Perhaps the newco will serve as a vessel for further consolidation of sports and linear assets, including those owned by Disney," he added while also wondering if the new company might also one day merge with Venu.
Editor's note: The story has been updated with additional commentary from ACA Connects, MoffettNathanson and KeyBanc.
You May Also Like
.jpg?width=700&auto=webp&quality=80&disable=upscale)
