FuboTV (FUBO 2.23%) made headlines in early 2025 when it agreed to merge with Disney's (DIS 1.22%) Hulu streaming service. This is a very big deal for FuboTV, and the stock has risen dramatically since the agreement was announced. Should interested investors buy now before the deal is done, or does it make more sense to wait and see what happens?
What does FuboTV do?
FuboTV says it has "a global mission to aggregate the best in TV, including premium sports, news and entertainment content, through a single app." In the U.S. market, the product it sells is "a sports-first cable TV replacement product." Basically, it is competing with the major content providers with an aggregated cable replacement for so-called cord-cutters.
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That's not exactly a bad plan, but it is still a fairly big project to undertake since companies like Disney, among many others, have created compelling streaming products of their own. And cable providers are increasingly offering their services through the web, as well. Notably, even if a consumer uses FuboTV, they still need a connection to the internet to make it work. Cable and phone providers are still how large numbers of consumers reach the web.
What does Disney do?
Disney is a media titan with massive content franchises. Hulu was an early effort to break into the streaming world, with multiple original partners. At this point, Hulu's partners have stepped back, preferring to start their own streaming services. That includes Disney. Merging FuboTV with Hulu, with Disney ending up retaining a 70% stake in the company, seems more likely to benefit Disney than Hulu or FuboTV.
That's because FuboTV could end up being a mere vassal of Disney. In that scenario, Disney could sell content to FuboTV with costs so high that FuboTV barely makes a profit. Another scenario to consider is that Disney simply sells its stake in FuboTV, leaving FuboTV with a larger business, but one that is still at a strategic disadvantage as content makers push their own streaming products.
What's happening at FuboTV today
The interesting thing is that FuboTV didn't have a great first quarter in 2025. For example, the company reported GAAP earnings of $0.55 per share in the first quarter. But if you remove one-time items, the company actually lost $0.02 a share. That was an improvement from an adjusted loss of $0.14 a year earlier, but FuboTV is still a money-losing venture. Worse, FuboTV's subscriber base declined year over year in the first quarter. The first-quarter showing suggests it isn't entering into the Hulu pairing on the strongest footing.
Meanwhile, it is taking on a large business that it will operate separately from its FuboTV operation. Complexity will dramatically increase for FuboTV, given that Hulu is a larger streaming business. So execution will be very important, noting that it is entirely possible that FuboTV is biting off more than it can chew. That's highlighted by the company's first-quarter subscriber issues.
What are the possible outcomes?
Could Hulu combining with FuboTV be a massive win for everyone involved? Sure, that's one possible outcome, but there are negative outcomes that could transpire as well. Disney's large ownership stake could leave FuboTV beholden to Disney, placing the desires of other shareholders in a distant second place. FuboTV's not-so-great first-quarter subscriber numbers could be a harbinger of trouble to come even as it bulks up its subscriber count with Hulu. And Disney could just be attempting to offload a business that it doesn't want before the business really starts to show signs of weakness.
Tiny FuboTV taking on the much larger Hulu service does sound exciting. But for most investors, it probably makes more sense to wait and see how the new FuboTV performs following the transaction before buying. After FuboTV's big stock price jump, it seems like there's a lot of good news already priced in here.
