Disney Stock Gains as Hulu Live TV, Fubo Merger Closes
The deal creates the sixth-largest U.S. pay-TV provider, positioning Disney to better compete with rivals like YouTube TV in the streaming wars.
The Walt Disney Company (NYSE: DIS) has finalized the merger of its Hulu + Live TV business with sports-centric streaming platform FuboTV, a strategic move that creates a more formidable player in the competitive live television market. Disney will hold a commanding 70% stake in the newly combined entity.
Shares of Disney rose nearly 2% to $112.33 in morning trading as investors reacted to the consolidation. The deal establishes the sixth-largest pay-TV provider in the United States, boasting a combined subscriber base of nearly 6 million, positioning it to more effectively challenge market leaders like Google's YouTube TV.
The transaction is a significant step in Disney CEO Bob Iger’s ongoing effort to streamline the company's direct-to-consumer operations and achieve sustained profitability in streaming. According to the official announcement, Fubo's existing management team will continue to operate the combined service. Disney anticipates the merger will be immediately cash-flow positive, driven by operational efficiencies and new revenue synergies.
Under the terms of the agreement, Disney will also provide Fubo with a $145 million term loan in 2026, ensuring the new entity is well-capitalized for growth and integration initiatives. The move aims to leverage Hulu + Live TV's broad entertainment offerings with Fubo's extensive sports programming, creating a more compelling package for consumers cutting the cord from traditional cable.
While Disney's stock saw a modest gain, shares of FuboTV (NYSE: FUBO) surged approximately 29% on the news, reflecting the transformative nature of the deal for the smaller company. The merger provides Fubo with the scale and backing of a media giant, potentially resolving long-standing investor concerns about its path to profitability.
Wall Street's reaction has been cautiously optimistic. Analysts see the strategic rationale in building a scaled competitor, though some express lingering questions about the long-term profitability of the virtual multichannel video programming distributor (vMVPD) model, which faces high content licensing costs. Some analysts have reiterated a 'Strong Buy' rating, viewing the integration with Disney's assets as a key catalyst, while others maintain a more neutral stance pending evidence of successful execution.
This consolidation comes at a critical time in the media industry. As traditional television viewership declines, media conglomerates are racing to build profitable streaming businesses. Disney's move to combine its live TV assets with Fubo is a direct response to the intensifying competition for viewers' time and subscription dollars.
The new entity will focus on integrating its technology and content libraries to create a seamless user experience. For Disney, the deal not only strengthens its live TV segment but also provides a clearer path for bundling opportunities with its flagship services, Disney+ and the on-demand Hulu library. Investors will be closely watching upcoming quarterly reports for details on subscriber growth, cost savings, and the financial performance of the newly merged operation as a key indicator of the success of Disney's evolving streaming strategy.