Warner Bros Discovery the big loser in Disney’s Fubo TV sports move

Streaming Media

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Perhaps this was David Gandler’s plan all along. The CEO and co-founder of sports centric streamer FuboTV has executed a play that not only appears to consign proposed mega-rival Venu Sports permanently to the sidelines but gives his company a chance to grow with the almighty backing of Disney.

The agreement to merge Disney's Hulu + Live TV with FuboTV will not only see Fubo dropping its anti-trust lawsuit against Venu but appears to cast Venu’s other main partner, Warner Bros Discovery, out in the cold.

After the deal announced today receives shareholder confirmation, Disney will hold a 70% stake in Fubo with Gandler continuing to lead the company, offering consumers the existing services of both FuboTV and Hulu + Live TV as both combined and separate products.

A combined service would unite FuboTV’s 1.6 million U.S customers with the 4.5 million of Hulu + Live TV to create the second largest live TV streaming service on the market, behind only YouTube TV which amassed over 8 million subscribers early in 2024.

Significantly, the deal also includes a new carriage agreement which will enable Fubo to launch a Sports & Broadcast service featuring Disney's top sports and broadcast networks, reportedly to include ESPN+.

Fubo already carries packages including MLB Network, NBA TV, NFL Network, NFL RedZone, NHL Network, and beIN Sports while Disney’s other premier sports and broadcast networks including ABC, ESPN, ESPN2, ESPNU, SECN and ESPNEWS.

About the only missing major sport is NBA which until recently was a lock-in for WBD’s TNT Sports. However, the new eleven year $77bn deal signed by the league until 2035-36 locks-out WBD in favor of Amazon, Comcast’s Peacock and Disney.

With a new Disney-led Sports & Broadcast service and with NBA already covered what need would Disney have now to ally with WBD to launch Venu?

As part of the settlement, Disney, Fox, and WBD will collectively pay Fubo $220 million while Fubo agrees to end litigation that would have dragged on for months, and may well have resulted in a win for Fubo.

When Venu was proposed last February, FuboTV immediately slapped the venture with an antitrust suit which was upheld by a New York judge in August. At the time Gandler argued that Disney, WBD and Fox aimed to “monopolize the market, stifle any form of competition, create higher pricing for subscribers and cheat consumers from deserved choice.”

“Simply put, this sports cartel blocked our playbook for many years and now they are effectively stealing it for themselves,” he added.

Now, in a joint release with Disney, Gandler says, “We are thrilled to collaborate with Disney to create a consumer-first streaming company that combines the strengths of the Fubo and Hulu + Live TV brands. This combination enables us to deliver on our promise to provide consumers with greater choice and flexibility. Additionally, this agreement allows us to scale effectively, strengthens Fubo’s balance sheet and positions us for positive cash flow. It’s a win for consumers, our shareholders, and the entire streaming industry.”

For Disney, Justin Warbrooke, EVP and Head of Corporate Development, added, “We have confidence in the Fubo management team and their ability to grow the business, delivering high-quality offerings that serve subscribers with the content they want and offering great value.”

Disney’s major move in sports is the fall launch of a standalone SVOD, informally called ESPN Flagship. The new DTC, with no publicly announced price, could mark a spinoff of the cable giant. The company laid the groundwork to lasso new viewers by offering ESPN content as part of larger Disney entertainment bundle.

New York-based FuboTV was founded in Jan 2015 by Gandler, Alberto Horihuela, and Sung Ho Choi.  The platform operates in the US, Canada, and Spain and aggregates over 300 live sports, news, and entertainment networks.

Before the deal, FuboTV’s major shareholders included BlackRock, Vanguard Group and State Street Corp. Gandler owned 0.9%, according to a diligent report at Business Strategy Hub which also noted that the company is not yet profitable but posted a 28% year-over-year increase in revenue growth and a 9% surge in subscribers in 2023.