Disney Company recently demonstrated proficiency in strategic asset management through their conduct.
It's official! The Walt Disney Company (DIS) is planning to become a major stakeholder in streaming television outfit FuboTV (FUBO), which also operates as a cable alternative. Disney aims to own 70% of FuboTV, with its similar service Hulu+Live becoming part of the FuboTV family, albeit operating separately for now. This move comes as Disney and Fubo TV have agreed to halt Fubo's plans to partner with Fox and Warner Bros. Discovery for launching a sports-centric streaming service.
Fubo TV will remain a publicly traded company, with Disney buying yet-to-be-issued shares within the next year and a half. The news has sent Fubo TV shares soaring by 250%. Some believe this move has saved the company, providing it with much-needed funding.
While the deal seems like a win-win, experts believe Disney derives more benefits than Fubo. In fact, Disney has the option to acquire Fubo outright, but the agreement appears to be a strategic move to reduce its involvement in the cable television business.
The announcement signals Disney's interest in focusing on content creation and bypassing the traditional cable industry. This move allows Disney to monetize its big-ticket content through various channels outside of the conventional cable television industry.
As Disney emerges as a dominant player in the streaming game, the future of the cable television industry is uncertain. Although Disney will remain a significant shareholder, it has allowed Fubo TV's management team to continue operating the company, signaling its disinterest in the business.
This move is primarily driven by rapid changes in the media landscape. Streaming platforms like Amazon and Netflix are capturing live sports, potentially ushering in a wave of cord-cutting. Even ESPN, a staple of cable television, now faces competition from Disney's upcoming streaming platform, Venu.
The agreement between Disney and Fubo TV is still pending approval from Fubo tv's shareholders and regulators. However, as Fubo shares continue to soar, investors may see this as an opportunity to cash in on its current gains. As the terms of the deal unfold, investors will closely watch the price at which Disney acquires its 70% stake in Fubo TV, as it could significantly impact the company's valuation in the near future.
This investment could provide Fubo TV with the necessary funds to survive and thrive, asDisney's financial support could significantly boost its money reserves for future financing needs in the competitive finance landscape of the streaming industry. With Disney's expertise in investing in successful ventures, this strategic partnership might pave the way for Fubo TV's continued growth in the field of streaming services.
