How small-cap streamer Fubo, YouTube rival and Disney partner, built its business

Streaming service Fubo was launched a decade ago to solve a single problem — the lack of a single platform where American soccer fans could watch international matches. Since then, it has expanded beyond the U.S., eliminated a competitor, and secured Disney as a partner. Analysts now see over 60% upside in Fubo stock.

FuboTV was founded in 2015 by three experienced advertising-industry professionals: David Gandler, Sung Ho Choi, and Alberto Horihuela.

Prior to launching Fubo, Gandler had spent over 15 years in video sales at media companies such as Scripps Networks Interactive, Time Warner Cable Media Sales, and NBCUniversal’s Telemundo Media, according to Bloomberg. In the 2010s, he developed advertising formats for DramaFever, a subscription video streaming service focused on Korean dramas, through which he met his two future cofounders of Fubo.

Gandler also had entrepreneurial experience — of a rather unusual kind: At 23, he moved to Russia and launched a startup. It was the early 2000s, Vladimir Putin had just become president, and investors and partners did business with no contracts or paperwork. The startup eventually floundered; Gandler later said he “didn’t see results quickly enough” and walked away. But the experience taught him that staying committed to one's ideas is essential in business. He also learned how to juggle multiple problems at once and negotiate on the fly.

When DramaFever was acquired by Japan’s SoftBank in 2014, Gandler decided that his last bastion was live television sports, notes Bloomberg.

Fubo, in a way, arose from a personal need of Gandler’s. A die-hard fan and former soccer player, he found it odd that there was not a single platform where he could catch the same games his friends abroad were watching.

Thus Fubo was born, with Gandler as CEO. By 2016, it had already grown to become the second-largest U.S. aggregator and distributor of linear OTT (over-the-top, referring to video content provided over the internet, bypassing traditional distribution like cable) sports content with 40,000 subscribers. It held agreements with such TV platforms as Univision Networks, beIN SPORTS, GolTV, and Benfica TV, according to Broadband TV News. Bloomberg notes that Fubo was also the first U.S. virtual multichannel video program distributor to offer 4K streams that could be watched on up to four screens simultaneously.

The Hollywood Reporter points out that its earlier investors included Mexican-American media company Univision Communications, then-Fox Networks Group CEO Anthony Vinciquerra, and Blake Krikorian, Sling Media cofounder, and a streaming video pioneer. In the next funding round, in March 2016, 21st Century Fox and Sky, one of Europe’s largest cable, satellite, and streaming TV providers, each invested $6 million in Fubo.

By 2019, the company had raised $145 million, according to Forbes, which included it in its list of promising startups on track to hit a $1 billion valuation. Also on that list were the fintech Dave and language-learning platform Duolingo, which now has a market capitalization of $14.2 billion.

That was a year before Fubo went public by merging with FaceBank, a developer of human likeness technologies for the metaverse, in spring 2020. Later that autumn, Fubo conducted a secondary offering on the New York Stock Exchange, selling 18.3 million shares — 20% more than originally planned — at $10 apiece, the midpoint of the indicative price range.

Since then, the stock is down 70%. Today, the company’s market capitalization stands at $1.03 billion.

Fubo started out as a niche product that offered live streams of soccer channels like GolTV and Benfica TV to U.S. audiences. Later, it expanded to stream other sports. Gandler wanted to build a massive sports platform but realized it was unfeasible — too many licensing deals would be needed. “Everyone is trying to get a piece of the action,” he told Bloomberg.

Eventually, Fubo expanded beyond sports. The platform now offers entertainment content, movies, news, and various shows across more than 200 channels. “With startups, it’s not linear at all,” Gandler said philosophically. There’s no straight road to success — sometimes one has to go off the beaten path.

In its 2023 financials, Fubo said its motto was “come for the sports, stay for the entertainment.” It attracts subscribers with broadcasts of sporting events, given the built-in demand for sports, and retains them through various engagement features like favorite channels, recorded shows, and AI-powered recommendations.

Fubo generates revenue through advertising and paid subscriptions. FaceBank noted years ago that the number of viewers opting for cable and satellite TV was declining, whereas streaming was gaining traction. This shift has driven advertisers toward the streaming segment, according to a 2023 Comscore study.

In early January, Fubo announced a landmark deal to merge with Disney’s Hulu + Live TV. Under the terms of the agreement, Disney will receive a 70% stake in the combined company, while Gandler will remain CEO. The stock will continue trading under its current ticker symbol.

Analysts are now gauging Fubo’s prospects through the lens of this merger.

On January 6, the day the merger was announced, Fubo jumped about 250% to $5.06 per share before gaining another 8% the next day.

The combined company could become the second-largest streaming platform in the U.S. after YouTube TV, argues the Motley Fool. Insider Monkey believes it will be the sixth-largest pay-TV player in the U.S. In March of this year, the outlet also spotlighted Fubo as one of the 11 best-performing stocks so far in 2025.

The Motley Fool notes that the merger will instantly elevate Fubo to the top tier of the streaming industry and could triple Fubo’s market capitalization. The partnership with Disney also makes Fubo a safer investment, the Motley Fool adds. 

The combined company will have around 6.4 million subscribers, with Disney accounting for 73% of them. Hulu + Live TV will contribute over 75% of the revenue. As of end-2024, Fubo had 1.68 million subscribers and $1.59 billion in revenue.

However, Fubo is still not profitable, the Motley Fool points out. In 2024, it reported a net loss attributable to shareholders of $172.3 million. It is unclear whether Hulu will be the key to turning a profit, but, as the Motley Fool explains, the new customers are a big win, as more viewers make Fubo more appealing to advertisers. 

Interestingly, about a year before the deal was announced, Fubo had filed an antitrust lawsuit against the Walt Disney Company, FOX, Warner Bros. Discovery, and their affiliates. The companies were planning to launch a streaming service called Venu Sports — essentially a competitor to Fubo. Fubo claimed the media giants were stealing its concept and stifling competition in the U.S. sports streaming market. “This sports cartel blocked our playbook for many years and now they are effectively stealing it for themselves,” Gandler was quoted as saying. He described this joint streaming service as “borderline racketeering.”

In the end, Fubo secured a legal injunction to block the launch of Venu on anticompetitive grounds before later agreeing to drop the lawsuit in exchange for a $220 million settlement. “A funny thing happened after that: Within days, Venu Sports came undone on its own,” the Motley Fool adds.

Fubo currently operates in the U.S., Canada, and Spain. According to the official website, it also runs a TV streaming platform, called Molotov, in France as well. 

For the full-year 2024, the company reported a “significant improvement” in free cash flow for the second consecutive year — by more than $100 million to $104 million. The Motley Fool also points out that 2024 marked the first time that Fubo had generated positive free cash flow.

But there is also a catch, the Motley Fool notes. As the majority shareholder in the merged company, Disney will provide a $145 million term loan to Fubo. As a result, business decisions will likely be made in favor of the largest shareholder’s interests, concludes the Motley Fool. Additionally, Fubo will probably have to pay Disney for the rights to stream its content.

The Motley Fool believes that may be enough to turn many investors off.

According to MarketWatch, out of the eight coverage analysts who cover Fubo, four rate it a “hold,” three a “buy,” and one a “sell.” Their average target price of $4.85 per share suggests over 60% upside versus the closing price yesterday, April 3.