In a surprising deal announced on Monday, Disney is set to combine its Hulu Live TV business with Fubo, the live TV streaming service known for its extensive sports coverage. Under the terms of the deal, Disney will own about 70% of Fubo, which will continue to be available to viewers as a separate offering.

Disney and FuboTV on Monday announced a planned merging of Hulu Live + TV and Fubo. Disney will have a 70% ownership stake in Fubo when the deal closes.

The deal will create a streaming multichannel video service that is second only to YouTube in scale, while potentially allowing the Venu service to move forward.

Fubo will be combined with Hulu's live TV service and offer a new streaming package with ABC and ESPN channels.

Disney announced a deal with pay-TV provider Fubo to combine Hulu + Live TV with Fubo's operations in a joint venture, ending Fubo's Venu lawsuit.

Walt Disney Co said on Monday it would merge its Hulu + Live TV business with smaller rival FuboTV , removing a significant hurdle to the launch of its sports streaming venture with Fox Corp and Warner Bros Discovery .

Disney's Hulu + Live TV and sports streaming service Fubo are combining in a deal that will also see the settlement of a lawsuit against the creation of Venu Sports. Fubo and Hulu + Live TV both allow customers to stream live broadcast and cable networks on their connected TVs,

The launch of sports streamer Venu, "and potentially new packages from Fubo, appears to be an important strategic lever to cast a wider net and catch all potential subscribers," says one Disney analyst.

Fubo and the Disney-owned Hulu Plus Live TV services will be merging their live TV streaming operations, both companies announced on Monday. The Walt Disney Co. will become the majority stakeholder of the combined business, with the joint service working under Fubo's brand name.

These benefits are all hypothetical for now, but any attempt by Fubo and Disney to take on YouTube TV has to mean good things for subscribers: the two streaming services will naturally need to get more competitive to win over YouTube TV subscribers, be it by bolstering the channel list, reducing the price or improving the user experience.

Disney will merge its Hulu + Live TV virtual MVPD with competitor Fubo, expanding its sports-focused distribution while settling a suit over skinny bundle Venu.