The Department of Justice has commenced a formal investigation into the merger of online television businesses between The Walt Disney Company and FuboTV Inc., according to a new report by Eriq Gardner of Puck. The merger of Hulu + Live TV and Fubo would form the second-largest digital pay television provider in the United States with more than 6.2 million subscribers.
This deal occurred about five months after Fubo obtained a preliminary injunction preventing the launch of Venu Sports, a forthcoming standalone joint streaming venture that included Disney, FOX Corporation and Warner Bros. Discovery, and all three media conglomerates subsequently agreed to make an aggregate cash payment of $220 million to Fubo. As part of the deal, Disney also entered into a carriage agreement with Fubo that allowed the streaming provider to create a sports and broadcast service that includes entities such as ESPN, ABC and ESPN2 among other networks, and it also committed to provide a $145 million term loan to Fubo in 2026.
Under the merger agreement, Disney is set to own 70% of the new joint venture, while Fubo will be accruing the other 30% and operating the newly combined business under its management team, which is led by co-founder and chief executive officer David Gandler. The companies also announced that Hulu + Live TV and Fubo would continue operating as two distinctive brands. Amid the report of a formal investigation, Gardner wrote that Disney and Fubo have already started responding to information requests coming from investigators.
When the two companies initially reached this deal, DirecTV issued an antitrust complaint to the court, stating in its letter that “Defendants cannot purchase their way out of the antitrust violations,” referring to The Walt Disney Company. EchoStar also submitted a complaint regarding the merger, explaining that it appeared “designed to eliminate court jurisdiction over this multifarious harm by effectuating the preliminary injunction’s expiration, rather than addressing the underlying competition issues.” The company also explained how Dish, Sling and other distributors were going to “suffer antitrust injury.”
The investigation occurs as Skydance Media and Paramount Global reached a definitive agreement to merge under a two-step transaction that is awaiting regulatory approval from the Federal Communications Commission. In addition, the FCC announced last month that it is investigating ABC and Disney regarding its diversity, equity and inclusion policies.
Barrett Media produces daily content on the music, news, and sports media industries. To stay updated, sign up for our newsletters and get the latest information delivered straight to your inbox.
