Hulu+ Live TV will be merged with a smaller competitor after a long-running legal dispute is finally resolved.
Disney – which owns Hulu – and its bundled streaming service FuboTV have agreed to combine their online live TV businesses, it was announced on Monday.
The combination creates the second-largest Internet pay-TV company in North America, behind YouTube TV, with 6.2 million subscribers.
The new service will be bigger than the third major player among online cable providers, SlingTV.
The deal also potentially paves the way for the launch of Venu – Disney’s sports streaming venture that combines ESPN content with Fox and Warner Bros Discovery.
Fubo has ended its antitrust lawsuit alleging that Venu would lead to higher prices for Americans watching sports.
Announced in February, Venu will make sports available from multiple sources in one centralized app and will shake up the world of sports broadcasting.
The deal does not include Hulu’s subscription business, in which members pay a monthly fee to stream the service’s catalog of content at any time.
Disney’s popular Hulu+ Live will merge with Fubo in a new business deal
News of the deal sent Fubo’s shares soaring in early trading, surging more than 120 percent within minutes.
A district court judge ruled that Fubo was likely to win the case and issued an order temporarily banning Venu’s launch, Reuters reported.
“All lawsuits between Fubo and Disney have been resolved,” the companies said Monday.
The three media majors will ask the US Court of Appeals on Monday to overturn the ruling.
As part of Monday’s announcement, Disney will also enter into a new carriage agreement with Fubo, allowing Fubo to create a new sports service with Disney’s sports and broadcast networks, including ABC, ESPN and ESPN+.
Fubo and Hulu + Live TV will remain available to consumers as separate offerings after the deal closes.
“The planned merger between Fubo and Hulu+ Live TV is a positive development for the streaming strategy of Disney, Fox Corp and Warner Brothers Discovery (WBD),” Jason Cuomo, Senior Vice President of Moody’s Ratings, said on Monday.
“While the combined service will have only 6.2 million North American subscribers, the real benefit is Fubo’s simultaneous agreement to drop all lawsuits against the planned joint venture Venu, the larger streamers.”
Moody’s believes Venu “has the potential to create a new suite of substantial sports streaming programming for avid sports fans.”