walt disney co.

Walt Disney Co. on Wednesday said it finalized its deal to acquire a majority stake in FuboTV and swiftly combined its Hulu + Live TV business with the sports-focused operation.

The union creates the nation’s sixth largest pay-TV service with nearly 6 million domestic subscribers.

Financial terms were not disclosed.

Similar to competitors DirecTV, YouTube TV and Charter Spectrum, both Hulu + Live TV and Fubo distribute traditional channels including broadcasters ABC, CBS and cable channels Fox News, Bravo and ESPN.

The combined company will be overseen by a nine-member board led by Brad Bird, former chairman of Walt Disney International. The firm will continue to offer Fubo and Hulu + Live TV as separate services available through their respective apps.

Disney’s investment plans were announced in January, after the much smaller Fubo sued Disney and two other media companies over their plans to launch a high-profile streaming joint venture, Venu Sports. Fubo argued the collaboration of Disney, Fox Corp. and Warner Bros. Discovery was “a sports cartel,” one that would crush its business.

A judge agreed based on anti-trust concerns, blocking further development of Venu.

Disney’s deal to acquire 70% of New York-based Fubo ended that litigation.

The combined business will be led by Fubo Chief Executive David Gandler, who co-founded the service, and Fubo’s management team.

“Since Fubo’s founding a decade ago, our vision has always been to build a consumer-first streaming platform defined by innovation and value,” Gandler said in a statement. “Together with Disney, we’re creating a more flexible streaming ecosystem that gives consumers greater choice, while driving profitability and sustainable growth.”

His firm will have access to a $145 million term loan that Disney agreed to provide. Fubo’s ad sales team will join Disney’s sales organization.

The company’s stock will continue to be publicly traded under the FUBO ticker. Existing Fubo shareholders represent about 30% of the company. Shares were up slightly to $3.95 in mid-day trading.

“Sound of Freedom” distributor Angel Studios made its stock market debut Thursday as the company looks to expand its streaming service and eventually penetrate international markets.

The Provo, Utah-based firm is trading on the New York Stock Exchange under the ticker symbol ANGX. Shares of the company rose 8% to $13.

Angel Studios’ launch on the public market is the latest step in the company’s unconventional journey into the entertainment business.

Founded by brothers Neal, Daniel, Jeffrey and Jordan Harmon, the company began as VidAngel, a service that allowed viewers to sanitize Hollywood movies by erasing sex, violence and swear words. But in 2016, VidAngel was sued for copyright infringement by Walt Disney Co. and Warner Bros., who said the company’s business model — which involved purchasing thousands of DVDs and Blu-ray discs and allowing users to stream them online — was essentially piracy.

VidAngel eventually settled the case, and the Harmon brothers sold off the filtering business. The company rebranded as Angel Studios and kept its content production and crowdfunding operation.

Today, the firm operates a streaming service and releases movies theatrically, including 2023’s massively popular “Sound of Freedom,” which grossed $250 million worldwide, and the animated film “The King of Kings,” which came out in May and tells the story of Jesus. The studio focuses on what it calls “values-based storytelling,” and its slate is determined through the vote of its 1.5 million Angel Guild members, who also get free movie tickets and other perks.

“It’s really a combination of the values of a broader audience,” said Jordan Harmon, president. “If you look at movies like ‘The Sound of Music,’ or ‘Casablanca’ or ‘12 Angry Men,’ all those were broad, incredible stories that touched the lives of tens, if not hundreds, of millions of people. Those are the type of stories that we think fall right into this values-driven, light-amplifying mission.”

Though considered small for Hollywood, Angel Studios moved to become a publicly traded company because its nearly 70,000 investors required it to, said company Chief Executive Neal Harmon. The company merged with a special purpose acquisition company (or SPAC) called Southport Acquisition Corp. to go public. A SPAC is essentially a shell company that exists solely to buy a private company and take it public without the scrutiny of a traditional IPO.

“We’re turning the way that this industry works on its head,” he said. “And because we are not doing the traditional Hollywood gatekeeper thing, we also needed to access capital in an untraditional way.”

The path is far from the potato farm in Idaho where the brothers grew up, and where the nearest neighbor was a quarter-mile away. Working together on the farm — and sharing a bedroom for years — helped foster the communication and bond between the brothers, said Jeff Harmon, chief content officer.

“If you look in Hollywood, the best partnerships have all been brothers,” he said, ticking off several successful movie business sibling partnerships including the Disneys, Warners and Nolans. “When they actually work together really well, it becomes unstoppable.”

About 10 million YouTube TV subscribers could lose access to Fox News and Fox Corp. channels that broadcast sports in a fee dispute that comes just days before the start of college football.

The Google-owned television service notified customers that Fox-owned channels, including Fox Business and local stations such as KTTV Channel 11 in Los Angeles, may be dropped from their program line-ups as soon as Wednesday afternoon if the two sides fail to reach a new distribution pact.

YouTube TV viewers would be without “The Five” and other Fox News programs. Sports fans could miss out on Friday night’s Auburn-Baylor football game and Saturday’s high-profile contest between Texas and Ohio State, along with three regional Major League Baseball games.

A prolonged blackout could interrupt the start of Fox’s NFL season that begins on Sept. 7.

“Fox is asking for payments that are far higher than what partners with comparable content offerings receive,” YouTube said late Monday in a blog post. “Our priority is to reach a deal that reflects the value of their content and is fair for both sides without passing on additional costs to our subscribers.”

The dust-up comes as YouTube TV has become one of the most formidable television providers.

Earlier this year, Nielsen ranked YouTube, including its video service, as the largest television distributor in the U.S. by share of viewership. YouTube’s popular bundle — it also offers the NFL Sunday Ticket package of out-of-market games — has dramatically cut into the business of legacy pay-TV providers, including Charter Spectrum, DirecTV and Dish Networks.

“While Fox remains committed to reaching a fair agreement with Google’s YouTube TV, we are disappointed that Google continually exploits its outsized influence by proposing terms that are out of step with the marketplace,” Fox said in a statement, adding the dispute could force its channels to go dark “unless Google engages in a meaningful way soon.”

Last year, YouTube generated $54.2 billion in revenue, second only to the Walt Disney Co., according to the MoffettNathanson research firm. The analysts estimated that fast-growing YouTube TV would reach 10 million subscribers this year. That slightly trails Charter, which operates the Spectrum service, and Comcast. YouTube TV has eclipsed the once powerhouse satellite TV service providers.

Disputes between programmers and pay-TV providers have become increasingly common in recent years amid a weakening of television economics. The high cost of sports rights has become a major rub for pay-TV distributors who have been asked to pay higher fees to mitigate the loss of subscribers.

Last year, DirecTV customers lost access to Walt Disney Co. channels, including ESPN, for nearly two weeks.

The battle was costly. DirecTV acknowledged that thousands of subscribers fled — many to YouTube TV — during the blackout. Viewers who wanted to watch the U.S. Open tennis tournament, college football, “Jeopardy!” and “Wheel of Fortune” were upset by the outage.

In 2023, a separate dispute led to Disney channels going dark on Spectrum.

YouTube said Monday that it was “working diligently with the team at Fox to reach an agreement.”

Should the channels go dark, the company will provide customers with a $10 credit. YouTube said customers could also sign up for Rupert Murdoch’s television company’s new streaming service, Fox One, which costs $20 a month.

In the last several years, YouTube has become an increasingly formidable competitor to streaming services and entertainment studios, providing videos from amateur and professional creators, as well as livestreaming major events and NFL games.

Now its growing threat to studios is playing out in the courts.

The Google-owned platform recently poached Justin Connolly, president of platform distribution from Walt Disney Co.

On Wednesday, Disney sued YouTube and Connolly for breach of contract, alleging that Connolly violated an employment agreement that did not expire until March 2027 at the earliest.

Connolly oversaw Disney’s distribution strategy and third-party media sales for its streaming services like Disney+ and its television networks. He also was responsible for film and TV programming distribution through broadcasting and digital platforms, subscription video services and pay networks.

As part of his role, Connolly led Disney’s negotiations for a licensing deal renewal with YouTube, Disney said in its lawsuit.

“It would be extremely prejudicial to Disney for Connolly to breach the contract which he negotiated just a few months ago and switch teams when Disney is working on a new licensing deal with the company that is trying to poach him,” Disney said in its lawsuit.

Disney is seeking a preliminary injunction against Connolly and YouTube to enforce its employment contract.

YouTube did not immediately respond to a request for comment.

At YouTube, Connolly will be become the company’s head of media and sports, where he will be in charge of YouTube’s relationships with media companies and its live sports portfolio, according to Bloomberg.

YouTube accounted for 12% of U.S. TV viewing in in March, more than other streaming services like Netflix, according to Nielsen. YouTube’s revenue last year was estimated to be $54.2 billion, making it the second-largest media company behind Walt Disney Co., according to research firm MoffettNathanson.

Unlike many other major streaming platforms, YouTube has a mix of content made by users as well as professional studios, giving it a diverse and large video library. More than 20 billion videos have been uploaded to its platform, the company recently said. There are over 20 million videos uploaded daily on average.

Streaming services such as Netflix have brought some YouTube content to their platforms, including episodes of preschool program “Ms. Rachel.”On a recent earnings call, Netflix co-Chief Executive Greg Peters named YouTube as one of its “strong competitors.”

Connolly entered into an employment agreement with Disney on Nov. 6, Disney said in its lawsuit. That contract ran from Jan. 1, 2025 to Dec. 31, 2027, with Connolly having the option of terminating the agreement earlier on March 1, 2027, the lawsuit said.

As part of the agreement, Connolly agreed not to engage in business or become associated with any entity that is in business with Disney or its affiliates, the lawsuit said. Disney said YouTube was aware of Connolly’s employment deal with Disney but still made an offer to him.

Entertainment companies have brought lawsuits in the past to stop executive talent poaching by rivals.

In 2020, Activision Blizzard sued Netflix for poaching its chief financial officer, Spencer Neumann. That case was later closed, after Activision asked to dismiss the lawsuit in 2022.

Netflix years ago also faced litigation from Fox and Viacom alleging executives broke their contract agreements to work for the Los Gatos-based streaming service. In 2019, a judge issued an injunction barring Netflix from poaching rival Fox executives under contract or inducing them to breach their fixed-term agreements.

Editorial library director Cary Schneider contributed to this report.