Disney buys Fubo, ending ongoing Venu Sports lawsuit

The streaming market is once again getting shaken up in a massive way. Disney, the parent company to ESPN, is reportedly acquiring a majority stake in Fubo, a rival in the streaming space.

Notably, this move is also going to kill Fubo’s lawsuit over Venu Sports as part of the merger. Venu Sports is a joint streaming venture from Disney, Fox, and Warner Bros. Discovery. Fubo had launched a lawsuit over its formation last year.

The lawsuit had already made for a difficult legal battle between Disney and Fubo. Importantly, it blocked the intended debut of Venu Sports last Fall. That ability to end the legal battle, as well as better compete with the likes of YouTube TV, were the driving forces behind this merger.

As part of the merger, Disney will combine its Hulu + Live TV service with Fubo’s operations. That new entity will have more than 6.2 million North American subscribers. Disney shareholders are going to hold 70% of the venture. Fubo will own the rest and run the operations behind the service. The two services are expected to be offered separately post-closing and Hulu remains available through a larger Disney bundle.

WATCH Steelers vs. Ravens on Wild Card Weekend only on Prime Video by CLICKING HERE

Fubo’s sports packages are also going to become more extensive with Fubo getting access to ESPN, ESPN2, ESPNU, the ACC and SEC networks, and ESPN+. Those are all current Disney networks.

The deal will also see the Venu Sports partners pay a $220 million payment to Fubo, as well as a $145 million loan from Disney to Fubo scheduled for January 2026.

“This transaction represents an incredible opportunity to build a consumer-first, live TV streaming company,” said David Gandler, Fubo co-founder and CEO, in an investor call early Monday. “At deal close, our company is expected to become immediately cash-flow positive, instantly making Fubo the major player in the streaming space.”

Fubo posted a $55 million loss in its most recent fiscal quarter from continued operations. At one point, Gandler even shared Fubo may need to go into bankruptcy if it went on the market. On top of that, the company has seen its stock price drop by more than half in the last year. However, that did rapidly change on Monday when Fubo shares opened up by 170% before retreating somewhat.

As for Venu Sports, it moves closer to going live. However, for the time being, there is no timeline for that to happen with the lawsuit just now being settled. ESPN is also planning its own new streaming service, currently called Flagship, which appears to be the company’s top priority.