Disney Buys Fubo, Killing Venu Lawsuit

The long-running legal battle between Fubo and Disney over the formation of Venu Sports is over—and in perhaps the most dramatic way possible—as the ESPN parent company is acquiring a majority stake in the rival streamer to create a potentially market-shaking joint venture.

Disney will merge its own Hulu + Live TV service with Fubo’s operations to form a new entity with more than 6.2 million North American subscribers. The new venture will be held by 70% of Disney shareholders, with Fubo owning the rest and running operations. The deal also includes a $220 million payment to Fubo from the Venu Sports partners—Disney, Fox, and Warner Bros. Discovery—as well as a $145 million loan from Disney to Fubo scheduled for January 2026.

The two services will still be offered separately post-closing, and Hulu will also remain available in the larger Disney streaming bundle. The Hulu on-demand streaming service is not part of the transaction. The dramatic deal, however, still achieves two major objectives: creating a stronger live-streaming service to compete against others such as YouTube TV, which said a year ago it had eight million subscribers, and resolving all litigation between Fubo and Disney. 

“This transaction represents an incredible opportunity to build a consumer-first, live TV streaming company,” said Fubo cofounder and CEO David Gandler in an investor call early Monday. “At deal close, our company is expected to become immediately cash-flow positive, instantly making Fubo the major player in the streaming space.”

Fubo sued Venu Sports, the sports-streaming service, last summer, arguing the initiative violated U.S. antitrust law. The company had succeeded in blocking the intended debut last fall of Venu Sports, to the point where it remained an open question whether that service would ever fully materialize. 

The status of Fubo as a business, however, remained significantly challenged, with the company posting a $55 million loss from continuing operations in its most recent fiscal quarter, while the company’s stock had fallen by more than half in the last year. Previously, Gandler said Fubo was looking at bankruptcy if Venu Sports hit the market. 

Much of that radically changed with Monday’s trading, though, as Fubo shares rose more than 250%, closing at $5.06 per share—the stock’s highest level in nearly three years.

More Sports Through Fubo

The pact also includes an additional carriage agreement with Disney in which Fubo will gain access to key Disney sports networks such as ESPN, ESPN2, ESPNU, the ACC and SEC networks, and ESPN+. Those networks will help form a new sports-oriented service offered within Fubo, enhancing the service’s existing sports-oriented focus.

“Fubo will now be able to provide even more sports,” Gandler said. “Crucially, Fubo has the potential to create skinnier sports, news, and entertainment bundles according to consumer needs.”

Venu Moving Forward

Venu Sports, meanwhile, is still proceeding toward a public debut, industry sources close to the agreement said. There is no specific timetable yet; the legal settlement has just been filed.

For ESPN, the planned rollout later this year of its direct-to-consumer product—currently carrying the internal name of Flagship—remains the top corporate streaming priority. At the company’s last earnings call, Disney CEO Bob Iger called Flagship “the best product the consumer has ever seen in sports.”