Fubo Sued Disney, so Disney just bought Fubo

For months, sports streaming service Fubo has successfully blocked the launch of a rival streamer owned by Disney, Fox and Warner Bros. Discovery. This fight is over today, with Goliath bought David. Fubo and Disney announced an agreement which will see the Mickey Mouse Company take majority ownership of its sports streaming competitor.

Under the terms of the deal, Hulu + Live TV, Disney’s cable-style live TV streamer, will be combined with Fubo to create a new company that will be led by Fubo co-founder and current CEO David Gandler. Hulu + Live TV and Fubo will both continue to operate as separate services. Fubo will also receive a new carriage agreement with Disney that will allow it to launch a subscription service that will broadcast Disney’s massive collection of sports networks including ABC, ESPN, ESPN2, ESPNU, ESPNEWS, ESPN+, SEC Network and ACC Network.

So what does Disney get out of all this? Well, it’s moving forward with plans to launch its own sports streaming service.

Earlier this year, the company announced plans with Fox and Warner Bros. Discovery to spin off a streamer called Venu Sports that bundles the companies’ collective broadcast rights into a single platform. In theory, the platform would offer subscribers access to most nationally televised NBA, NHL and MLB games, as well as college football and basketball.

But Fubo had managed to intervene in that plan. Back in April, it is filed an antitrust lawsuit against the companies involved in Venu Sports and launched a public defense campaign asking consumers to contact their representatives and urging them to block the common sports streamer. For Fubo, the situation was basically a matter of life and death; (probably correctly) assumed that it would not be able to compete with a platform owned by the same companies with which it will negotiate streaming rights.

Now that the opposition is over. Fubo agreed to settle all litigation related to Venu Sports as part of its new deal with Disney. He also got a pretty penny for that result. Disney, Fox, and Warner Bros. Discovery agreed to pay $220 million in total to Fubo in exchange for ending its legal action. Disney also provides its new partner with a loan of $145 million for its operation. And if the deal falls through for any reason, Fubo will pocket a $130 million termination fee. Money talks, as it turns out.

Chances are good that the deal will move forward, as it will happen under the Trump administration and the president-elect is already reported a more friendly stance when it comes to mergers and acquisitions. That said, you never know when they’ll try to block something out of personal spite instead of principle. It is reported tried to stop AT&T from buying Time Warner in part because of his personal distaste for CNN.

While the fate of Venu Sports is still unknown at this time, its biggest obstacle – Fubo – is now out of the way, and its second biggest obstacle – a Department of Justice concerned about antitrust – is on the way Everything comes from Disney.