It isn’t a shocker that the first deal to go through in 2025 is in digital sports streaming.
This sub-sector is scorching hot.
It was only just a few days ago when Netflix rolled out its debut in streaming NFL during Christmas when they broadcasted 2 games.
Live American football – not the European variant - is the holy grail of digital content and the beefiest of marketers with the deepest of pockets will cough up to place their ads in these commercial slots.
Disney (DIS) will combine its Hulu + Live TV business with sports streamer FuboTV (FUBO) in the first major media dealmaking move of 2025.
Disney will control 70% of Fubo. Shareholders of the sports streamer will own the remaining 30% of the combined business, which will operate under the Fubo publicly traded company name.
Disney is struggling in many parts of their business, for example, is underperforming in their theme parks.
Their movies also suck.
Pro football is the last bastion of premium content and even the woke employees at Disney understand that.
Disney stock has essentially halved since 2021 with shareholders furious about their lack of strategic vision.
The acquisition of Fubo gives Disney a chance to restart in a sub-sector that has a glowing future.
Cord cutters are exploding and since last year’s Presidential election, the trust in legacy media has never been at such a low ebb, and rightly so with the poor level of content quality.
The combination of the two businesses will form one of the largest digital pay-TV providers as consumers search for cable alternatives amid increased cord-cutting.
Fubo, which offers users access to live TV channels over the internet, has primarily focused on sports.
Hulu + Live TV, categorized as a cable replacement option — similar to YouTube TV — allows users to stream from about 100 live TV channels across sports, news, and entertainment.
As a much smaller player, Fubo struggled with high content costs and the ability to curb subscriber churn and adequately compete in the marketplace — hence the lawsuit's inception.
The three companies first announced the joint venture last year, with an expected price point of $42.99 a month. The service will bring together their respective slates of sports rights and comes as media companies face pressure from investors to scale their streaming services and achieve profitability.
I’m not saying that digital streaming of pro sports is easy.
We aren’t in the early innings.
Content costs are astronomically high and subscriber churn can be a problem in the offseason.
The nightmare could end up like the NBA.
Look at sports like pro basketball (NBA, viewership is down 50% this season as subscribers flee the sinking ship.
The basketball commissioner created a model where most teams make the playoffs meaning the 82 game schedule has been deemed irrelevant causing their best stars to sit out games.
It’s just one example of the management of pro sports going down the drain and pro football isn’t immune to bad management too.
As it stands, I highly support Disney’s foray into Fubo and Fubo would be a great stock to pick up and hold at $4.80.
The stock is up from $1.44 this morning.
Live pro sports still fetches a premium and I don’t believe that will change any time soon.
Jump into tech stocks that have big investments planned in American football.
Much of the big growth opportunities have been saturated and I do believe the tech market will become more of a zig-zag trading market in 2025.
