Why Disney’s Major Fubo Deal Is About More Than a Sports Streaming Legal Battle

The Mouse House is expanding, with Disney combining its Hulu + Live TV business with Fubo, but the streaming TV deal may be about way more than settling a legal battle over Venu Sports.

Today, Disney announced its deal to combine its Hulu + Live TV business with Fubo, creating a combined virtual multichannel video programming distributor (MVPD) company. With the deal, Disney becomes the majority owner of the resulting company, controlling 70% of Fubo. This new combined business is operating under Fubo’s existing management team and the Fubo name, and Fubo and Hulu + Live TV will continue to be available to consumers as separate offerings.

As a result of the deal, Fubo will create a new sports and broadcasting service featuring Disney’s sports and broadcast networks. The combined company will have 6.2 million North American subscribers, reportedly making it the second-largest all-digital TV service after YouTubeTV’s 8 million.

Notably, Fubo had been engaged in a legal battle against Disney, Fox, and Warner Bros. Discovery over the launch of their proposed combined MVPD, Venu Sports, which Fubo claimed was anti-competitive. Now, all the litigation between the companies has been settled.

According to a statement from Disney, at signing of the transaction, Disney, Fox, and WBD will make an aggregate cash payment of $220 million to Fubo. In addition, Disney has committed to provide a $145 million term loan to Fubo in 2026 as part of the transaction.

Following the deal annoucement, Fubo’s stock surged 200%, according to reports.

“Fubo won concessions from its lawsuit in an indirect way,” Ross Benes, senior analyst at eMarketer, told ADWEEK. “Going after Venu contributed to a merger with Hulu.”

Disney, Fox, and WBD originally planned to launch Venu last year, but Fubo’s lawsuit halted those plans. With the lawsuit dropped, Venu has a seemingly smooth runway for a launch, and Fubo is expected to serve as a reseller of Venu Sports, according to reporting from The Desk.

Venu Sports did not immediately reply to a request for comment.

What happens next

In a constantly changing TV landscape, analysts told ADWEEK there’s more going on than just the legal issues being put to rest.

“Running a virtual cable service has proven unprofitable, even for the most successful products,” Benes said. “The culling of vMVPDs began with Playstation Vue and will continue.”

Benes noted that Hulu’s Live TV offering began under different ownership. (Disney reached an $8.6 billion deal with Comcast in 2023 to fully acquire Hulu.) Now, this new deal allows Disney to further offload being a pay-TV operator.

“Disney may be the majority shareholder of this new entity, but having it publicly traded as ‘Fubo’ and run by Fubo management gives the impression that they will explore offloading their pay-TV operator asset eventually,” Benes said.

Whether or not Disney eventually offloads Fubo, 2025 is only a few days in, so more consolidation and mergers are certainly on the way, according to experts.

“The consolidation of cable networks and the rise of new consumer bundles will take center stage in 2025,” Matt Sweeney, chief investment officer, GroupM US, recently told ADWEEK when reflecting on the topics that will dominate the TV industry this year. “Expect streamlined packages that combine must-watch content—sports, reality TV, scripted shows, and premium on-demand options.”

And as more deals get brokered with TV increasingly moving online, consumer confusion will follow, according to Mike Proulx, vice president and research director at Forrester.

“The rise of virtual MVPDs as an alternative (and eventual replacement) to cable and satellite TV seems at odds with core streaming services like Netflix and Prime Video aggressively brokering live programming deals,” Proulx said. “All of this means higher aggregate costs for consumers as they piecemeal together their television lineups in what seems like a never-ending game of whack-a-mole.”