In its last quarter before being acquired by Disney, pay-TV provider Fubo beat Wall Street forecasts and reached 1.63 million North American subscribers.
Disney last week announced the close of its acquisition of 70% of Fubo, giving it 6 million subscribers across it and Hulu + Live TV, each of which will continue to operate separately. The deal news came as Disney entered a pitched carriage battle with YouTube TV, the No. 1 internet-delivered pay-TV service and No. 3 overall. ABC, ESPN and other Disney networks have been dark on YouTube’s footprint of 10 million pay-TV homes since last Thursday night.
The Disney-Fubo transaction was part of a settlement of Fubo’s antitrust lawsuit against Disney, Fox Corp. and Warner Bros. Discovery, which had planned to launch a joint venture, Venu Sports. Fubo charged the media giants with anti-competitive behavior, and a federal judge agreed. The case was settled before trial, and Venu was scrapped.
Fubo’s revenue in the July-to-September quarter dipped 2% from the year-ago period to come in at $368.6 million. Earnings per share hit 2 cents on an adjusted basis, reversing a loss of 8 cents a share in the year-earlier period. The subscriber tally was the company’s highest level ever during the third quarter.
Wall Street analysts had expected a loss of 4 cents a share and revenue of $361.3 million.
During the quarter, Fubo launched a sports-focused bundle in 100 U.S. markets, with plans to expand it. It said in the suit that its previous efforts to come to market with such a bundle were thwarted by major programmers forcing it to carry general-entertainment fare, blurring the focus of the offering and making it more expensive. In the wake of the Fubo case as well as a 2024 distribution agreement with Disney, major distributor DirecTV launched a sports-focused bundle, as have other major operators. Disney’s ESPN, meanwhile, also debuted a beefed-up streaming offering combining full access to more than a dozen linear channels as well as streaming-only programming.
Along with the sports offering, Fubo during the quarter launched a channel store, enabling subscribers to sign up for subscription offerings like Hallmark+, DAZN1, MLB.tv, MGM+, STARZ and Paramount+ with Showtime. Some regional sports networks are also included into the store, with programming ingested into the Fubo interface, “further realizing our vision to make sports programming accessible and frictionless,” the company said in its quarterly letter to shareholders.
In the shareholder letter, founder and CEO David Gandler reflected on the Disney milestone.
“The completion of our transformative transaction with The Walt Disney Company to combine Fubo and the Hulu + Live TV business creates a strengthened pay-TV operator that aims to offer consumers more programming flexibility and choice,” he wrote. “We are very excited for the future and the value that we believe this transaction will bring to consumers and shareholders alike.”
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