Fubo Sued Disney, So Disney Just Bought Fubo

For months now, sports streaming service Fubo has been successfully impeding the launch of a competitor streamer jointly owned by Disney, Fox, and Warner Bros. Discovery. That fight ended today, with Goliath buying out David. Fubo and Disney announced an agreement that will see the Mickey Mouse Company take majority ownership over its sports streaming competitor.

Under the terms of the deal, Hulu + Live TV, the cable-style live TV streamer owned by Disney, will be combined with Fubo to create a new company that will be led by Fubo’s co-founder and current CEO David Gandler. Hulu + Live TV and Fubo will both continue to operate as separate services. Fubo will also get 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+, the SEC Network, and the ACC Network.

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

Earlier this year, the company announced plans with Fox and Warner Bros. Discovery to roll out a streamer called Venu Sports that would bundle the companies’ collective sports-related broadcast rights into one platform. In theory, the platform would offer subscribers access to the majority of nationally broadcasted 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 filed an antitrust lawsuit against the companies involved in Venu Sports and launched a public advocacy campaign asking consumers to contact their representatives and urge them to block the joint sports streamer from happening. For Fubo, the situation was basically a matter of life and death; it (probably correctly) assumed that it wouldn’t be able to compete with a platform owned by the very same companies that it has to negotiate streaming rights with.

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

Odds are good that the deal will move forward, as it’ll happen under the Trump administration and the president-elect is already signaling a friendlier stance when it comes to mergers and acquisitions. That said, you never know when he’ll try to block something out of personal spite rather than principle. He reportedly tried to stop AT&T from purchasing Time Warner in part because of his personal distaste for CNN.

While the fate of Venu Sports is still unknown at the moment, its biggest hurdle—Fubo—is now out of the way, and its second-biggest hurdle—a Department of Justice that cares about antitrust—is on the way out. Everything’s coming up Disney.