Walt Disney, Fubo near deal to merge their online live TV businesses

By Michelle F. Davis, Lucas Shaw and Christopher Palmeri 

Walt Disney Co. and streaming provider FuboTV Inc., are nearing a deal to combine their online live TV businesses, according to people familiar with the matter.  

As part of the transaction, Disney will fold its Hulu + Live TV business into Fubo, creating a new venture that will be 70 per cent owned by Disney and the rest by Fubo, the people said, asking not to be identified discussing confidential information.

 

The deal doesn’t include Hulu’s subscription video business, in which customers pay a fee to stream a catalog of content at their leisure. The TV venture will continue to operate under two brands: Fubo and Hulu + Live TV, one of the people said.

 

 

Together, the services would form the second-biggest digital pay-TV provider, with about six million subscribers, trailing only YouTube TV, they added. 

 

As part of the deal, Fubo plans to drop its legal claims against Disney, Fox Corp. and Warner Bros. Discovery over Venu Sports, according to the people, removing a hurdle to the roll-out of their upcoming sports streaming platform. 

 

The tie-up could be announced as soon as this week, assuming talks don’t fall apart, the people said. Representatives for Disney and Fubo didn’t immediately respond to requests for comment outside of normal business hours. 

 

Fubo last year sued Disney, Fox and Warner Bros. over Venu Sports, claiming the proposed sports-streaming joint venture would be anti-competitive. A hearing is scheduled for Jan. 6. 

 

Fubo is a virtual multichannel video programming distributor, which means it offers live TV channels over the internet as opposed to over cable, satellite or fiber. Hulu’s Live service, an alternative to cable TV, lets users stream from roughly 100 live TV channels including sports, news and shows.

 

Combining the services should position the venture to attract subscribers as customers look for online alternatives to cable TV. 

 

Fubo, which had a market value of about $481 million on Friday, will remain publicly traded, the people said. As the smallest virtual TV operator, it has faced challenges including expensive programming and subscriber churn. 

 

Venu Sports, the upcoming streaming platform developed through a joint venture by Walt Disney Co., Fox Corp. and Warner Bros. Discovery Inc. plans to provide access to live sports events from several major leagues, including the National Football League and the National Basketball Association. It will also include content from Disney’s ESPN and Warner Bros.’s TNT networks.