Disney merges Fubo with Hulu+ Live TV, challenging YouTube TV's dominance
- Disney announced a merger of Hulu+ Live TV with Fubo, combining their resources to become a major contender in the streaming service market.
- The deal positions the new entity as second largest behind YouTube TV with a combined subscriber base of 6.2 million.
- The merger indicates a strategic move for Disney as it prepares for leadership changes and aims to strengthen its streaming profitability.
On January 6, 2025, Disney revealed a merger of its Hulu+ Live TV service with Fubo, significantly reshaping the streaming landscape. This merger will position Disney as the second-largest streaming service provider, trailing only behind YouTube TV, which currently boasts around 8 million subscribers. With the combined total of 6.2 million subscribers from both services, they will still operate under their own branding even after the merger is finalized, which could take up to a year and a half. Financially, the deal includes substantial commitments, with Disney along with Fox and Warner Bros. Discovery set to make a cash payment of $220 million to Fubo. Additionally, Disney will provide a $145 million term loan to Fubo, due in 2026. Conversely, Fubo stands to gain a $130 million termination fee if the merger does not proceed as planned. This financial backing is essential as it positions Fubo to transform into a cash flow positive entity immediately upon the merger's completion, making it a significant player in the ever-competitive streaming industry. Moreover, Fubo's leadership, specifically CEO David Gandler, will maintain their roles post-merger, supplemented by a board of directors appointed by Disney. This transition reflects Disney's strategy to drive growth in its streaming services, especially given that it has recently achieved profitability in its streaming division. The merger will not only strengthen Disney's portfolio but also allow Fubo to innovate a new sports broadcasting service tailored to highlight Disney's network offerings. This strategic move comes during a transformative period for Disney, as the company prepares for the transition in its leadership with CEO Bob Iger stepping down. The merger also reflects a contemporary trend in the media industry where large-scale acquisitions are aimed at consolidating audience reach and enhancing streaming service offerings. Former Disney executive Preston Padden likened this move to previous successful acquisitions by Disney, underscoring its strategic vision in the competitive entertainment landscape.