Disney, FuboTV And Implications Of A Surprising New Sports Deal

Disney and FuboTV just kicked off the 2025 media and entertainment M&A sweepstakes with the announced merger of their competing virtual MVPD services Hulu + Live TV and Fubo. And in the biggest “by the way” in M&A history, the deal also settles Fubo’s lawsuit against Venu, the new “sports Hulu” from Disney, Warner Bros. Discovery, and Fox. While the window to closing will take some time, there are a few key takeaways we can already glean from the deal.

That was some case Fubo brought against Venu’s owners

I have been closely following the Venu venture – OK, I’m a sucker for alliteration – from its announcement nearly a year ago to the court decision on Fubo’s lawsuit just last September which stopped Venu in its tracks. When Fubo filed its complaint alleging that the construction of Venu would be anticompetitive in the sports streaming market, it was taking on media companies with a combined market cap of over $200 billion (most of it belonging to Disney of course). Fubo at the time had a market cap of roughly $500 million. Not much doubt about David versus the Goliaths here.

In the aftermath of Fubo willing a preliminary injunction to halt Venu in its tracks, take a look at what has belatedly fallen out of the Christmas tree for Fubo. This settlement will bring Fubo $220 million in cash from Disney, Fox and Warner Bros. Discovery as well as a separate loan from Disney for an additional $145 million. All this for a company whose total balance sheet this fall showed $223 million in cash and whose stock price was stuck in neutral for years. Fubo’s market cap has nearly quadrupled in the 24 hours since the announcement of the settlement.

And it’s not like Fubo is going away here as part of the deal. Disney will now own 70% of a continuing entity combining Fubo and Hulu + Live TV, and Fubo’s management team will run it with Disney controlling the majority of board seats. For its legacy streaming offering, Fubo gained a new distribution deal for Disney’s networks and, in the word’s of Fubo CEO David Gandler, the right to offer “skinnier, sports, news and entertainment bundles, according to consumer needs.” And if the deal collapses, Fubo will still receive a $130 million consolation prize. Not too bad a return for one lawsuit.

Venu’s future is still a maybe, but bundling survives

With the resolution of Fubo’s antitrust suit, Venu is presumably positioned to get back to its business of packaging the live sports offerings from its owners into one streaming package. But I’m not convinced how well paved that yellow brick road is now in a sports media world that has changed rapidly since the venture was announced. With the NBA moving from WBD to NBCUniversal, it not only diminishes WBD’s contributions to Venu’s offerings, but makes Peacock a more viable sports streaming alternative. Netflix has emerged as a powerful live sports streaming platform with the Mike Tyson-Jake Paul fight and the Christmas day NFL games featuring a hugely buzzy performance from Beyoncé. And we are getting ever closer to Disney’s launch of the stand-alone ESPN streaming service, which may further dim the appetite for a separate Venu product. It will still not be an easy path for Venu to navigate.

On the other hand, what Venu’s owners have managed to do with this settlement is to avoid a potentially disastrous court decision that could well have implicated not just Venu’s future but the broader practice of bundling programming by content owners which has been the foundation of everything from motion picture distribution to the cable network business for decades. This legal resolution will not only preserve current marketing partnerships such as those of WBD and Disney but many potential combinations involving content competitors including the new NBCU spin-off, the newly structured Paramount, smaller streaming platforms and digital giants Amazon, Alphabet’s YouTube, and Netflix. Bullet effectively – if expensively – dodged there. At least until the next aggrieved litigant weighs in.

Streaming’s complexity has likely only increased

As I recently wrote, the acceleration of bundling in the streaming world, although providing consumers access to larger content bundles with “one-stop shopping,” has not made the paradox of streaming choices any less complicated. And at least initially, the merger of operations with the Fubo and Hulu SVOD (subscription video on demand) packages aren’t going to make it much any clearer for “civilians.” The combined corporate entity will still provide separate offerings under the Fubo and Hulu+ Live TV. And don’t forget that “legacy” Hulu, without live but its library of on-demand streaming content, will be operated independently by Disney. In the announcement of the deal, even Fubo’s Gandler acknowledged that long-term it may well not make sense to offer Fubo and Hulu Live+ TV separately.

We still have the likelihood of a great deal of more M&A activity, which will further shift the streaming musical chairs, with or without any of those chairs being eliminated. And the new Fubo will itself be a candidate both for potential future acquisitions as well as potential acquisition by others. Talk about needing a scorecard to keep track. Remember when you could just look at TV Guide to figure out what to watch?