FuboTV Shares Surge on News of Merger with Disney's Online Live TV Business
Investing.com -- Walt Disney Co. and FuboTV (NYSE:FUBO) Inc. are reportedly close to merging their online live TV operations. According to sources who wish to remain anonymous due to the confidential nature of the matter, Disney will create a new entity by integrating its Hulu + Live TV service with FuboTV.
Disney will own 70% of this new venture, while the remaining shares will belong to FuboTV. The proposed merger does not include Hulu's subscription-based video service that allows customers to watch various content for a fee. The new entity will continue to operate under the two brands, Fubo and Hulu + Live TV.
If the merger is successful, the combined services will become the second-largest digital pay TV provider with approximately six million subscribers, surpassed only by YouTube TV.
As part of the deal, FuboTV plans to withdraw its legal claims against Disney, Fox Corp., and Warner Bros. Discovery related to Venu Sports. This move will eliminate a significant hurdle ahead of the launch of upcoming sports streaming platforms. FuboTV had previously sued these companies in 2021, claiming that the proposed sports broadcasting joint venture would be anti-competitive. A court hearing for this case was scheduled for January 6.
FuboTV operates as a virtual multichannel video programming distributor, offering live TV channels over the internet as an alternative to traditional cable, satellite, or fiber providers. Hulu's Live service also offers a similar alternative, allowing users to stream from around 100 live TV channels, including sports, news, and shows. The merger of these services has the potential to attract more subscribers seeking online alternatives to cable TV.
Despite being the smallest virtual TV operator with a market value of approximately $481 million as of last Friday, FuboTV will continue to remain a public company after the merger. The company has previously faced challenges such as costly programming and subscriber loss.
If negotiations do not break down, an announcement regarding the deal between Disney and FuboTV is expected this week. Representatives from both Disney and FuboTV did not respond to requests for comments after normal business hours.