Disney has struck a deal to merge Fubo with Hulu + Live TV, settling a lawsuit filed by Fubo last year against Disney, Fox, and Warner Bros. Discovery. The agreement paves the way for the launch of Venu Sports, a new sports streaming service, and marks a significant shift in the streaming landscape.

The merger will create a new multichannel video programming distributor, with Disney owning approximately 70% of the venture. Fubo's co-founder and CEO, David Gandler, will head the new entity. Notably, Hulu's core video subscription service will continue to operate independently.

In a statement, Gandler emphasized that the deal will enable Fubo to "deliver on our promise to provide consumers with greater choice and flexibility." He added that the agreement will allow Fubo 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."

The deal brings an end to Fubo's lawsuit, which was filed on grounds that the studios' plan for Venu Sports was anticompetitive. A hearing for the lawsuit was scheduled for today, but the case has been dropped following the agreement. As part of the deal, Fubo will receive a $220 million payout from Disney, Fox, and WBD. Additionally, Disney plans to provide Fubo with $145 million this year, and should the deal fall apart, Fubo will be due a $130 termination fee.

The development marks a significant turnaround for Disney, which faced a setback last summer when a federal judge sided with Fubo and blocked Venu Sports from its planned fall 2024 launch. The new deal clears the way for Venu Sports to move forward, although details on the service's launch timeline and features remain unclear.

The merger and the impending launch of Venu Sports are likely to have significant implications for the streaming industry. The deal could lead to increased competition in the sports streaming space, potentially forcing other players to adapt their strategies. It also underscores the growing importance of live sports in the streaming landscape, as major players like Disney, Fox, and Warner Bros. Discovery invest heavily in this area.

As the streaming landscape continues to evolve, this deal serves as a reminder that even the largest players must be willing to adapt and collaborate to stay ahead. The partnership between Disney and Fubo may be just the beginning of a new era of cooperation in the industry, as companies seek to provide consumers with the best possible viewing experiences.