Disney Ends Massive Lawsuit With Shocking New Merger

In 2019, Disney dove into the deep end of the streaming swimming pool with the launch of Disney+. The new streaming service featured a ton of classic Disney movies, in addition to original films and television shows. That same year, Disney also purchased a majority stake in one of the largest and most popular streaming platforms around — Hulu.

In the less than six years since its launch, Disney+ has exploded and is now available in more than 120 countries. Unfortunately, the streamer struggled with profitability under former CEO Bob Chapek, but finally saw a profit this past year.

Related: Disney+ Gets Defensive, Claims Only a Small Percentage of Streaming Content Has Been Deleted

While Hulu has never been a big problem for Disney, the same could not be said for Disney+ and ESPN+, Disney’s other streaming service that launched in 2018.

Bob Iger has been honest about the struggles faced by Disney+ and ESPN+. Earlier this year, he announced a plan to move ESPN+ into the black.

Disney would team up with Fox Sports and Warner Bros. Discovery to launch the ultimate sports streaming app. The new app, called Venu, would be the premier streaming service for subscribers who wanted to watch content from the NBA, MLB, NFL, PGA, and more.

While Disney, Fox, and Warner Bros. were excited about the merger, one company was enraged and immediately stepped in to try to prevent it.

FuboTV is a streaming service that is available throughout North America and Spain. While it originally launched as a platform to stream soccer games, it switched to all-sports streaming in 2017. Fubo claimed that the new merger would violate antitrust laws by allowing Disney, Fox Sports, and Warner Bros. to create a monopoly.

Venu was supposed to launch this past fall, but Fubo was granted a temporary injunction to prevent the launch.

Now, in a shocking twist, Fubo’s lawsuit has come to an end in the most interesting way — Disney has purchased a controlling interest in Fubo.

According to a report from Variety, Disney will own 70% of Fubo, with Fubo itself owning the remaining 30%, and the company will continue to operate under the name fans know and love.

Also under the deal, Fubo will create a new “sports and broadcasting service,” featuring Disney’s sports and broadcast networks. Disney is entering into a new carriage agreement with Fubo for the new tier that will feature networks including ABC, ESPN, ESPN2, ESPNU, SECN, ACCN and ESPNews as well as ESPN+.

In connection with the deal, Disney, Fox and Warner Bros. Discovery will make a cash payment to Fubo of $220 million. In addition, Disney has committed to provide a $145 million term loan to Fubo in 2026 as part of the transaction.

Related: Disney’s Move To Streaming Could Spell the End for Cable TV

As part of the contract, Fubo will also get $130 million should the deal not go through because of things like the failure to obtain regulatory approval on the terms outlined.

In a statement, Disney expressed its excitement about the merger, saying it will allow Fubo and Hulu+ Live TV to expand their offerings and attract more subscribers.

“This combination will allow both Hulu + Live TV and Fubo to enhance and expand their virtual MVPD [multichannel video programming distributor] offerings and provide consumers with even more choice and flexibility,” Justin Warbrooke, executive VP and head of corporate development for Disney, said in a statement. “We have confidence in the Fubo management team and their ability to grow the business, delivering high-quality offerings that serve subscribers with the content they want and offering great value.”

The deal between Disney and Fubo is expected to close in the next 12 to 18 months. Fubo’s existing management team will remain in place and will be in charge of the new venture.

Disney has not said what the settlement means for Venu, or if they are planning on moving forward with the new streaming service.

At the time of publication, neither Warner Bros. nor Fox have commented on the merger. Inside The Magic will keep readers updated if more information is released on Venu.

What do you think about the Disney/Fubo merger? Are you hoping Disney, Fox Sports, and Warner Bros. Discovery should move forward with Venu? Share your thoughts in the comments!