Combine Disney Hulu+ Live TV and Fubo

Disney Hulu+ Live TV will be integrated with… FuboThe two companies announced Monday the merger of two Internet TV packages.

Disney will become the majority owner of the resulting company – the publicly traded Fubo Corporation – with a 70% ownership stake. Fubo shareholders will own the remaining 30% of the company. The transaction is expected to close within 12 to 18 months.

Hulu+ Live TV and Fubo are streaming services that mimic a traditional cable TV package, offering linear TV networks. Together, the streaming services have 6.2 million subscribers.

Both services will remain available separately to consumers after the deal closes. Hulu+ Live TV can be streamed through the Hulu app, as well as part of the Disney bundle that also includes Hulu, Disney+, and ESPN+.

The deal does not include streaming service Hulu, known for creating original content like “Only Murders in the Building” and “The Handmaid’s Tale,” which competes with platforms like Netflix.

“We are now stewards of an iconic brand as it relates to Hulu,” Fubo co-founder and CEO David Gandler said during a call with investors on Monday. Hulu+ Live TV’s place within the Hulu ecosystem adds value by retaining users, he added.

“Obviously having two separate platforms today is not ideal,” Gandler said during the call. “We believe there are synergies on the backend….but right now we really want to give consumers the freedom of choice.”

While Fubo has long focused on offering sports and news, Hulu+ Live TV is known for its entertainment offerings as well, Gandler noted.

Fubo is expected to become cash flow positive immediately after the deal closes, “immediately making Fubo the major player in the live streaming space,” Gandler said on a call Monday.

Fubo stock, which closed Friday at just $1.44 a share, rose 250% on Monday.

Under the deal, Fubo and Disney settled lawsuits related to Venu, the proposed sports streaming service from Disney, Fox and Disney. Warner Bros. Discovery.

Fubo has sued Disney, Fox and WPD, claiming the service would be anticompetitive, and last year a US judge temporarily lifted… Forbidden Launch Fino.

When the Disney-Fubo deal is signed, Disney, Fox, and Warner Bros. Discovery jointly paid $220 million in cash to Fubo. Disney will also commit to providing a $145 million term loan to Fubo in 2026. If the deal falls through, Fubo will receive a $130 million termination fee.

The combined company will be led by Fubo’s management team including Gandler, while the majority of its new board will be appointed by Disney.

Bloomberg I mentioned Earlier Monday, an agreement to merge live TV services was imminent.

Fubo had 1.6 million subscribers in North America before the merger with Hulu+ Live TV and competes with other similar bundle platforms such as Google YouTube TV.

However, Fubo has long focused its portfolio on providing sports and news content. It is one of the last channels to offer a variety of regional sports networks, and it is the channels that host the majority of matches of local professional teams and often He beckons High fees from distributors.

As a result, Fubo lost decreased Entertainment-focused channels from its packages include AMC Networks channels, as well as Warner Bros. Television. Discovery networks.

Fubo executives said Monday that the newly combined company’s breadth will give it greater leverage in carriage discussions with other networks.

As part of the merger, the companies also announced Monday that Fubo and Disney have entered into a new carriage agreement that will allow Fubo to create a new sports and radio service featuring Disney’s networks. During the investor call, Fubo said it had also reached a new agreement with Fox.

Fubo’s focus on sports was the primary motivation behind its lawsuit against Disney and Warner Bros. Discovery and Fox’s syndicated sports streaming service, Venu.

Venu, which was scheduled to launch in time for the start of the NFL season in September, was intended to be a complete offering of sports networks and content from the three media companies that came together to create it. The application will be It costs $42.99 per month, to highlight the high cost of sports in a TV package and help avoid any violations of carriage agreements.

The judge in the case noted that Disney, Fox and WBD together control about 54% of all sports media rights in the United States, and at least 60% of all national sports broadcast rights in the United States.

Fubo alleged in its lawsuit that Venu was anticompetitive and would upend its business. When a judge temporarily blocked Venu’s launch in August, it was a big win for Fubo. The three media companies appealed the court ruling.

With this settlement, Venu can move forward with its launch, although no plans were announced on Monday.

Meanwhile, Disney has several irons in the fire when it comes to ESPN’s streaming options. In addition to its existing app, ESPN+, and Venu, ESPN plans to do so He releases A direct-to-consumer streaming app will launch later this year.

— CNBC’s Alex Sherman contributed to this article.

Disclosure: Comcast, which owns CNBC’s parent NBCUniversal, is a co-owner of Hulu.