Disney is merging Hulu + Live TV with Fubo, posing a challenge to YouTube TV

Disney and Fubo have reached an agreement to merge Hulu + Live TV with the companies’ FuboTV . This would create a new entity of which Disney would own 70%, with Fubo holding the remaining 30%. Once combined, the service will have more than six million subscribers, making it the second-largest digital pay-TV provider after YouTube TV.

This deal only includes Hulu + Live TV, not a traditional Hulu subscription. . The combined business will operate under Fubo, with current management remaining, although both FuboTV and Hulu + Live TV will continue to broadcast as separate entities. The new company will also negotiate carriage agreements with content providers without assistance from Disney.

Fubo plans to create a new streaming service dedicated exclusively to sports, which will leverage the contracts of Disney and broadcast networks like ABC and ESPN. As part of the deal, Fubo will drop all legal claims against the company in relation to Venu Sports.

Fino is a Which will broadcast content from Disney/ESPN and Warner Bros. Discovery and Fox. The multi-company streaming program was supposed to launch last fall, however because of . A hearing was scheduled for January 6, so this merger announcement certainly has auspicious timing.

Today’s deal means Venu Sports could be coming around again soon. An unnamed source said Hollywood Reporter but we don’t know if it will become available or not.

The agreement also includes new distribution rights between Fubo and Disney, where the former will be allowed to offer a package built around ESPN and ABC. In addition, Disney, Fox, and Warner Bros. will pay. Discovery to Fubo for $220 million, with Disney loaning the company an additional $145 million.

The merger is expected to be completed within the next 12 to 18 months, pending regulatory approval. There is a clause in the contract that requires Disney to pay Fubo $130 million if the deal fails to close for any number of reasons.