Investing.com -- Walt Disney (NYSE:DIS) Co. and FuboTV (NYSE:FUBO) Inc. are reportedly close to merging their online live TV operations. According to Bloomberg News, Disney is set to integrate its Hulu + Live TV service into FuboTV, forming a new venture.
Disney will own 70% of this new entity, with FuboTV holding the remaining shares.
The proposed merger does not include Hulu's subscription video service, which allows customers to stream a variety of content for a fee. The new venture will continue to operate under two brands, namely Fubo and Hulu + Live TV.
If the merger is successful, the combined services would become the second-largest digital pay-TV provider, boasting approximately six million subscribers. This figure is only surpassed by YouTube TV.
As part of the deal, FuboTV intends to withdraw its legal claims against Disney, Fox Corp (NASDAQ:FOXA)., and Warner Bros. Discovery relating to Venu Sports. This move would eliminate a significant obstacle to the launch of their forthcoming sports streaming platform. FuboTV had previously sued these companies in 2021, alleging that their proposed sports-streaming joint venture would be anti-competitive. A hearing for this case had been scheduled for Jan. 6.
FuboTV operates as a virtual multichannel video programming distributor, offering live TV channels over the internet as an alternative to traditional cable, satellite, or fiber providers. Hulu's Live service offers a similar alternative, allowing users to stream from roughly 100 live TV channels, including sports, news, and shows. The merger of these services could potentially attract more subscribers seeking online alternatives to cable TV.
Despite being the smallest virtual TV operator with a market value of about $481 million as of last Friday, FuboTV will remain a publicly-traded company following the merger. The company has previously grappled with challenges such as costly programming and subscriber churn.
The deal between Disney and FuboTV could be announced as early as this week, provided negotiations do not break down. Neither Disney nor FuboTV representatives have responded to requests for comment outside of regular business hours.
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