Disney (DIS) will combine its Hulu + Live TV business with sports streamer FuboTV (FUBO) in the first major media dealmaking move of 2025.

According to a press release, Disney will control 70% of Fubo. Shareholders of the sports streamer will own the remaining 30% of the combined business, which will operate under the Fubo publicly traded company name. 

In conjunction with the transaction, Fubo settled all litigation with Disney, Fox (FOX) and Warner Bros. Discovery (WBD) related to Venu Sports, the planned sports streaming platform previously announced by the trio. 

Shares of Fubo surged over 100% in early trading Monday on the heels of the announcement. Disney, Fox and WBD shares were all up about 1%.

The combination of the two businesses will form one of the largest digital pay-TV providers as consumers search for cable alternatives amid increased cord cutting. 

Fubo, which offers users access to live TV channels over the internet, has primarily focused on sports and news. Hulu + Live TV, categorized as a cable replacement option — similar to YouTube TV — allows users to stream from about 100 live TV channels across sports, news and entertainment.

On an investor call following the announcement, Fubo said the combined company is expected to "become immediately cash flow positive," with over 6.2 million subscribers in North America and over $6 billion in revenue. 

REUTERS / Reuters

The agreement will also provide $220 million in immediate cash to Fubo, plus $145 million in committed financing available in January 2026 to enhance liquidity and ensure continued investments. 

"We are delighted by today's outcomes," said David Gandler, co-founder and CEO of Fubo, who will also run the new business. "Increased scale means we have the flexibility to pursue diverse growth strategies, opening up a range of opportunities, both domestically and internationally."

Gandler added that while Fubo will continue to focus on sports and news, it will now be able to provide even more consumer options, including access to ESPN+ through amended distribution agreements with both Disney and Fox.

"Crucially, Fubo has the potential to create skinnier sports, news, and entertainment bundles according to consumer needs," he said, noting that Hulu + Live TV will remain an entertainment focused cable replacement service.

Overall, Fubo's management team said the deal will create a "a very competitive and exciting environment" and that the company is now "preparing" for its growth stage. 

ASSOCIATED PRESS

Last year, Fubo's antitrust lawsuit against Venu Sports alleged Disney, Fox and WBD used their "iron grip" on commercially critical sports content to extract billions of dollars from distributors and consumers. 

As a much smaller player, Fubo struggled with high content costs and the ability to curb subscriber churn and adequately compete in the marketplace — hence the lawsuit's inception. 

The media giants, according to Fubo's original complaint, earned profits by "bundling" sports with less desirable content, forcing Fubo to broadcast "unwanted, expensive content" and preventing the company from offering the packages customers actually want.

This past summer, a judge temporarily blocked the launch of Venu, citing antitrust concerns. With Fubo now settling its litigation, it's expected the service will face significantly less hurdles ahead of its anticipated launch. 

The three companies first announced the joint venture (JV) last year, with an expected price point of $42.99 a month. The service will bring together their respective slates of sports rights and comes as media companies face pressure from investors to scale their streaming services and achieve profitability.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance.