Shares of live TV streaming platform FuboTV (FUBO) jumped after Walt Disney (DIS), FOX (FOX), and Warner Bros. Discovery (WBD) abandoned plans to launch the sports streaming platform Venu Sports, in a complex story involving cord-cutters, sports rights, and pay TV platforms.
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“After careful consideration, we have collectively agreed to discontinue the Venu Sports joint venture and not launch the streaming service,” the companies said.
FUBO’s Decision to Drop Litigation Was Contentious
It all kicked off on Monday when FUBO said it would drop its case against Venu as it announced a deal with DIS to combine their offerings.
However, the decision to abandon the sports streaming platform came after U.S. satellite TV provider DirecTV challenged the dismissal of FUBO’s legal claims against Venu Sports, which had been a key part of FUBO’s tie-up with DIS.
The plans announced on Monday will see DIS and FUBO combine their online live TV businesses, while also simultaneously settling the antitrust lawsuit concerning the Venu Sports streaming service.
In the suit filed last February, FUBO had alleged that the launch of Venu Sports would “destroy competition and inflate prices for consumers.”
FUBO’s decision on Monday to drop the case raised concern. In a letter to U.S. Judge Margaret Garnet, U.S. satellite TV provider DirecTV stated that the settlement “restores an anticompetitive runway” for the joint venture defendants “to control the future of the live pay TV market.” Fellow satellite TV provider EchoStar had already expressed similar sentiments.
That runway no longer exists. “In an ever-changing marketplace, we determined that it was best to meet the evolving demands of sports fans by focusing on existing products and distribution channels,” DIS, FOX, and WBD said.
FuboTV Shares Surge as DIS Becomes Majority Owner
Under the terms of the agreement, DIS will combine its Hulu + Live TV business with FUBO and become the majority 70% owner of the resulting company, the companies said in a filing on Monday. The move caused shares in FUBO to leap more than 200%.
Following this, Roth MKM raised its price target on the stock, noting that the tie-up removes some of the risk around FUBO, including litigation. Wedbush raised the firm’s price target on FUBO to $6.40 from $3, saying the combination could become the dominant player in over-the-top broadcast.
Is FUBO a Good Stock to Buy?
Overall, Wall Street has a Hold consensus rating on FUBO stock, based on two Buys, five Holds and one Sell. The average FUBO price target of $3.91 implies about 27% downside potential from current levels. Shares of FUBO have risen by over 300% in 2025.
