Disney’s acquisition of a majority stake in Fubo has closed, after the U.S. Department of Justice completed its probe and cleared the controversial transaction, Front Office Sports has learned.
The completion of the deal—which will see the ESPN parent buy a roughly 70% stake in Fubo and merge it with the Hulu + Live TV streaming service—was announced Wednesday morning. Existing Fubo shareholders will own the remaining 30%. Fubo stock was up more than 19% in premarket trading Wednesday.
The DOJ had launched an investigation into the transaction for potential antitrust issues in April, but that probe has concluded and the agency okayed the deal within the last week, a source familiar with the matter tells FOS.
On Tuesday, Puck had reported that the ongoing federal government shutdown—which just entered its fourth week—could result in the imminent completion of the deal, because deadlines were set to lapse while Antitrust Division staffers remain furloughed.
The companies say the deal creates the sixth-largest pay-TV provider in the U.S. with almost six million subscribers. It will offer more than 55,000 live sporting events.
The deal, announced in January, includes a $220 million payment by Disney to Fubo and a $145 million loan scheduled for next year.
The transaction helped resolve legal claims stemming from the introduction of the now-shuttered Venu Sports, a joint streaming service that had been planned by ESPN, Fox, and Warner Bros. Discovery. Fubo had sued over the formation of Venu last summer, arguing the initiative violated U.S. antitrust law. Fubo succeeded in blocking the intended debut of Venu last fall, and the case was still ongoing when the saga came to a sudden end in early January when Disney agreed to buy the majority stake in Fubo.
Not everyone was pleased with the outcome. Satellite TV carriers DirecTV and EchoStar filed letters with the U.S. District Court, arguing that the Disney-Fubo deal and the resulting dismissal of legal claims did not “address the underlying competition issues,” and that Disney simply paid Fubo “to ensure cooperation from an aggrieved competitor.”
Lawmakers, including Sen. Elizabeth Warren (D., Mass.), in particular, also viewed the proposed transaction suspiciously. Warren said it would “allow Disney to simultaneously circumvent the lawsuit while gobbling up a competitor” and urged the DOJ to probe the deal.
“The favors keep rolling in for companies that suck up to Donald Trump—and who pays the price? The American people,” Warren said in a statement to FOS on Wednesday. “The Trump administration’s approval of this merger means sports fans should get ready for higher costs and fewer choices to watch the games they care about.”
Although Venu never got off the ground, something like it may still wind up existing now that Disney has completed its deal for Fubo. Disney CEO Bob Iger said in August that there have been discussions to add other companies’ sports offerings to the new ESPN streaming platform.
A representative for the DOJ declined to comment.
