Disney to combine Fubo with Hulu live TV service, ending sports streaming lawsuit

Sports streaming service FuboTV Inc. is set to be merged with Walt Disney Co.’s Hulu live TV service, the companies announced Monday.

The agreement endsNew York-based Fubo’s legal action against Venu Sports, the joint service announced last year by Disney, Fox Corp. and Warner Bros. Discovery. In a suit filed in U.S. District Court, Fubo had called the proposed venture “a sports cartel” that violated U.S. antitrust laws.

Fubo said in a statement that a Disney will control 70% of the new combined company. Fubo’s existing management team, led by the company’s co-founder and chief executive, David Gandler, will run the new company.

The deal is subject to approval by regulators and Fubo shareholders.

“We are thrilled to collaborate with Disney to create a consumer-first streaming company that combines the strengths of the Fubo and Hulu + Live TV brands,” said Gandler in a statement. “This combination enables us to deliver on our promise to provide consumers with greater choice and flexibility.”

The combined entity will start out with 6.2 million subscribers and offer a new sports and news-oriented program package that includes a suite of ESPN channels and the ABC television network.

The combined company will negotiate carriage agreements with other channels for both Hulu + Live TV and Fubo services independently from Disney.

Fubo is getting $220 million and a $145-million term loan next year as part of the transaction.

Venu was announced with the intention of giving consumers access to a bundle of channels providing live sports at a lower cost than the traditional pay TV subscription.

Along with ESPN, the platform was meant to carry channels from Fox and its sports channels and Warner Bros. Discovery’s Turner channels.