Fubo soars 247% as Disney plans to take a majority stake and combine the streamer with Hulu

• FuboTV stock surged 247% after a deal with Disney was announced Monday.
• The deal merges FuboTV's streaming service with Hulu's live TV subscription service.
• The agreement settles litigation and includes financial commitments from Disney to FuboTV.

FuboTV stock soared as much as 247% on Monday after the company inked an agreement with Disney.

Per the agreement, FuboTV's streaming service will combine with Hulu's live TV offering. Disney will own a 70% stake in the company.

The stock traded as high as $4.99 a share before paring some gains after midday.

The combined streaming service will have 6.2 million North American subscribers, making it the sixth largest pay-TV service and the second-largest all-digital TV service.

Competitor YouTube TV, owned by Alphabet, counted over 8 million subscribers 2024, making it the largest all-digital TV service.

"This combination will allow both Hulu + Live TV and Fubo to enhance and expand their virtual MVPD offerings and provide consumers with even more choice and flexibility," said Justin Warbrooke, executive vice president at Disney.

As part of the deal, all litigation between Fubo and Disney and between Fubo and FOX and Fubo and Warner Bros. Discovery has been settled.

FuboTV had previously sued Disney, FOX, and Warner Bros. Discovery to halt its launch of Venu Sports, billed as a sports streaming platform jointly owned by the three media companies.

Venu Sports has yet to launch.

The owners of Venu Sports will make an aggregate cash payment to FuboTV of $220 million. Additionally, Disney has committed to provide Fubo with a $145 million term loan in 2026. Finally, Disney will pay Fubo a termination fee of $130 million if the transaction between the two companies fails to close due to regulatory concerns.

Following the completion of the deal, Fubo will still operate as a stand-alone company and plans to launch its own sports and broadcasting service, which will feature Disney's sports and broadcast networks.

Disney owns various cable channels, including ESPN, ABC, Disney Channel, FX, National Geographic, and Freeform.

Shares of Disney increased as much as 1.5% on Monday to an intraday high of $112.85. Shares of FuboTV hit an intraday high of $4.99, representing its highest level since September 2022.

Shares of FuboTV are down about 50% since its October 2020 IPO at $10 per share.